Episode 185: Atlassian Sacks Thousands, Koala to IPO, Grace Tame’s Disgrace, Star Directors Get Off, Best AI Platforms and Biggest EV Adopters
The guys discuss Atlassian’s mass termination event, Koala goes public, Grace Tame ruins the Australian of the Year Award, Michael Lee’s Star Casino judgement, and what are the best LLMs to use.
The Contrarians catchup
Atlassian bought Loom 18 months ago and, in Adam’s words, ruined it. Adam spent ten minutes in a doom loop trying to get it to work for his board video. Adir’s suggestion: do what Ruslan Kogan did for his AGM - use AI to speak on your behalf.
Adam heaps praise on Justice Michael Lee after his Star Casino judgment, calling him the standout judge in Australia. “He doesn’t bring politics or personal biases into his judgments. He’s not ideological. You’d think that would be a prerequisite for a judge, but it isn’t.”
Adir declares business intelligence software dead. “Short the entire category. Tableau, Microsoft BI, anything you’re dumping data into and saying ‘help me analyse this’ - put it all in the rubbish bin. Claude is so natively good if you know how to prompt it.”
The guys weigh in on whether it should be legal to burn the Australian flag and yell “Death to Australia” on the streets of Sydney. Adam: “I think you have to be disproportionate in the penalty and then deterrence will kick in. Whoever wants to say death to Australia definitely doesn’t think it’s worth five years in jail.”
Former Labor premiers and ministers, including John Brumby and Martin Foley, are collecting plum government board roles. Adam: “Martin Foley oversaw the quarantine disaster. Could you find a more incompetent person to give $200,000 a year? They find the most hopeless people and give them every role they can find.”
Grace Tame and the Australian of the Year
Former Australian of the Year Grace Tame drew fierce condemnation after leading a Sydney rally calling for a “global intifada” and defending the term’s meaning in a piece published in Crikey. Adam delivered a full monologue dissecting her claims, calling out factual errors and what he sees as a fundamental betrayal of the values she was honoured for - having refused to be silenced as a victim of child sexual abuse.
Adam: “Grace Tame claims to be a victims advocate for the rights of young girls, yet she’s calling for a global intifada - an uprising that led to the murder of a 15-year-old innocent Australian girl in a pizza restaurant in Jerusalem.”
Adam: “One cannot claim to be an advocate of women’s rights and girls while remaining silent (or even worse, supportive) towards a force that used sexual violence as a systematic tool of terror on October 7. This isn’t about politics. It’s about fundamental consistency of character.”
Adir: “She should go and meet the parents of Malki Roth. The reason this is so ironic is that the very thing she received the award for was her courage and her refusal to be a victim. And she has now sunk so deeply into false victimhood. I think a lot of it is relevance deprivation syndrome - the only way to get attention now is to be extreme.”
Koala IPO: a rare good news story
Online furniture retailer Koala is heading to the ASX at an enterprise value of $260M (10.5x forecast EBITDA) targeting $330M in revenue for FY26, representing 20% growth, and $25M in EBITDA, up 111% year-on-year. Of the $68M raised, $20M repays debt. The company previously attempted to list at $500M and was rejected by the market. CEO Danny Milham is not selling a single share.
Adam: “It’s hard to say anything bad about this. They’ve come back at half the price with a much better business. The market said $500M was too much, they listened. And the underlying business is performing really well.”
Adam: “I don’t even know how they get 65% gross margins at such low prices. It’s actually astonishing. This could be a billion-dollar business in four years if they keep growing at 20-24%.”
Adir: “You don’t have to race into the IPO, buy it in the aftermarket. The risk is that brand strength doesn’t equal pricing power. If you’re known for being cheap and cheerful, you can’t charge more. That caps the margin ceiling, and I think they’ll struggle to get beyond 10-15% EBIT margins.”
Atlassian’s 1,600-person reckoning
In a stumbling 20-minute video call, Mike Cannon-Brooks told 1,600 Atlassian staff they were fired - including the company’s CTO, Rajeev Rajan. Some 480 cuts hit the Australian workforce. Atlassian shares have fallen 80% from their 2021 peak of $458.
A separate report revealed a crisis meeting at Scott Farquhar’s $130M Point Piper mansion preceded the announcement, with Cannon-Brooks dialling in remotely because of a sick child. A leaked quote from an Atlassian employee: “I am in absolute shock they did this via email. I can’t understand how they fell so far.”
Adam: “Had they simply stopped hiring three years ago and let natural attrition run, they’d be at 5,000 people now. They’re at 10,000. This doesn’t go far enough. They need to get to 5,000 to justify even a $20B valuation.”
Adam: “The greatest bait and switch was ‘you can work from anywhere.’ Employees took scrip instead of cash, and now those same people have been given dud stock that’s down 80% and are being fired. That’s the ultimate shafting.”
Adam: “The $50M a year Atlassian Williams F1 sponsorship, for a business losing hundreds and hundreds of millions a year, is just unforgivable. Mike should not be running this business. He was a great leader up to 2015. This was an incredible business. These are people who have just lost their way.”
Five other stories worth following:
Melbourne startup Magic Valley has launched Rogue Pet, dog treats made with cultivated pork and plant ingredients. The company hopes entering the pet food market first will build trust, experience and revenue before introducing cultivated meat to humans.
US gas prices have jumped $0.60 in under two weeks amid the Iran war, boosting interest in electric vehicles. Car retailers report rising searches and orders for EVs, hybrids and plug-in hybrids as fuel costs climb.
One Battle After Another dominated the Oscars, winning six awards including best picture and best director for Paul Thomas Anderson. Rival film Sinners won four, while Jessie Buckley took best actress and KPop Demon Hunters won animation.
FCC chair Brendan Carr threatened to revoke broadcasters’ licenses over alleged “news distortions” about the Iran war. Free speech advocates criticised the move, noting the FCC lacks authority over newspapers, internet outlets and networks.
The S&P 500 is down only 3% this year, but the surface calm hides sharp volatility. Fifty-seven stocks have surged over 20% while 47 have fallen at least 20%, led by energy winners and struggling SaaS companies.