Xro - xero

[CJ]

Crap - got out to early - there is a buy order in there at $7.95 and a couple at $7.80.

Is this going to keep going up? Is this overseas/US investors coming into the market now they have seen Theil has doubled down (Volume too small to be US funds but some individuals might be taking a punt?)

[Xerof]

Thats all pre-open auction stuff. Look at the sellers as well. Should open lower

[CJ]

Thats all pre-open auction stuff. Look at the sellers as well. Should open lower

Yip and buyers seem to have disappeared.

(I really do need to learn about the pre-open process. I knew it wouldn't go that high but it seems weird you can just throw in a really high bid with no risk it will cost you that much - will try and find a thread on it [Edit: http://www.sharetrader.co.nz/showthr...der-queue-work ] )

[Blendy]

hmmm, i wonder what sort of price is worth getting back in with such wild fluctuations going on? I think I would feel uncomfortable paying something in the $6's, but if it's going to go up and down wildly then could be worth it...

[CJ]

Xero's revenues should be around $41 million for FY2013.

It does not make a profit. It won't for some time yet.

It is worth around $850m to $900m in market cap.

I am genuinely struggling to understand how people feel Xero is worth $7.60.

I apologise for being a negative nelly, but I will atone for this by again congratulating those sitting on big wins with this holding.

My post #698 when into hypotheticals where I came out with a good case of $3B in 4 years or alternative being $500m. I did not do a worse case as that is obviously $0.

Blendy - it is all over the place today - down to 7.02, currently at 7.11 with a buy in at 7.25 but the first seller at 7.40. I predict it will settle down in a week or so and then continue its slow trajectory upwards. Will be interesting to see what it settles at. WOuld probably have to be below $6.50ish, maybe even lower for me to jump back in???

[GRIFFIN]

Volatile to say the least its like going back to around 1986.

[Zaphod]

Volatile to say the least its like going back to around 1986.

This is the same behaviour as the 'Dot-Com' bubble all over again. Thankfully, I doubt this one will bottom out at $0!

[CJ]

Thankfully, I doubt this one will bottom out at $0!

They have a real product and revenue stream. If they decided just to go for organic growth focusing on NZ/Australia, and cut out some costs as a result, the company is probably worth ~$400 - 500m.

[Toasty]

I am hoping that it goes below $5.95 so I can buy back in with the portion that I foolishly sold at that level. I am assuming that Thiel is wanting to see the kind of returns on his latest purchase that he has seen on the initial purchase.

[blobbles]

Re-entry for me = around $4 - $4.50. Not because I sold out too early, because that's what I think the company is worth going forward over the next couple of years.

You have to remember, these guys are up against some serious competition. Everyone seems to be treating them like they will make a huge dent with their product (which while good is lacking basic features compared to the big boys). The big boys are also responding, getting their online offerings up to scratch, being able to compete and often better Xero by offering the features Xero is missing. People often say that Xero is cheaper and they are, but they don't offer the same range of products. When they develop those products, they will likely charge more for them, narrowing the argument.

Essentially, you are betting that Xero, with its smaller size and clever NZ brains, will be able to outmanoeuvre the big boys by continuing to create innovative products, being first to market and having the others take so long to catch up that it convinces businesses to join them. I damn well hope that they do this (as a patriotic kiwi) and if I see the signs this happens, I will be back in. But at the moment... I just don't see them as an $850 million company. If they are able to get, say, a million customers, giving them a $300 million turnover, then they start to look better. But this number is about 3 or 4 years down the track. I would rather invest in other companies that will give me less volatile SP return and probably dividends in this time rather than bet at the level Xero is at.

My other advice to Xero would be: go to Asia. There is very little like they offer in China, for instance, where the big boys don't really have a hold. An online offering in China, integrating with Taobao etc (online shops that are growing at an astronomical rate), at a lower price point, you could be incredibly successful rather quickly in a huge growth market. Being an incumbent in a country with 1/4 of the worlds population and literally 10's of millions of small businesses puts you in a position of power. If you are really looking for growth, hit Asia.