Xro - xero

[Silverlight]

Thanks Drongo. Jeez there are some bitchy commenters on that site.

$600k sold overseas already this morning. Weird price spread as well. I bet the guy who paid $11.83 is a bit cheesed.

The International "trades" are not real trades. When brokers execute a trade on the ASX, or another overseas exchange, they re-report them back here from their own purposes, particularly market share statistics. Sometimes, they are genuine trades like arbitrage trading.

However trading in WBC or ANZ in NZ are good examples of trades that are not arbitrage, but solely market share stats boosting. No one has actually bought or sold those shares in NZ, more likely the NZ entity of a broker has some hand in the trade made on the ASX, and to boost their daily share of the market they report them on the NZX.

[maddog]

Its not just a case of worrying about a company (singular) coming up with a better product. Rather the worry is more about other parties (plural) coming up with products that provide better value or products better fitted to the various market niches. Xero is trying to suit multiple niches in multiple markets and thats a very tough game to win at.

BTW it is already a packed market with many excellent products - some already better suited to particular niches than Xero.

[blobbles]

Moosie,

SaaS (Sofware as a Service) startups (actually XRO is a bit past this stage) must move very, very fast as software development (DONE PROPERLY WITH THE RIGHT PEOPLE!!!!) doesn't actually take all that long and competitors can quickly catch up (6 months or less) unless you already have significant market penitration (> 40%). This isn't XRO just yet but it could be! They are doing it right!

BTW, if XRO are getting the right people they'll be paying $120k and more for them. In software development its better to have 10 of the right people than 40 of mediocre type. I suspect that many ex-TEL employee may not fit this description (as I hope TEL will be keeping the right people and losing the huge numbers of dross that seem to infest TEL).

Bang on belgarion, in fact in software development having 1 of the right person is better than having 100 of the mediocre type, as one person can completely revolutionise/drive/invent something new and exciting while the 100 simply drain resources compared to their input. Some ex Telecomer's though will fit the bill, I know a few people who are stifled in the Telecom environment, breaking out into something like Xero would be great for them and for Xero especially after a few years of being in the doldrums...

[Zaphod]

We pay experienced C# and PHP developers between $70-$85K depending upon experience. Highly experienced developers could see over the $100K mark.

I'd expect similar rates in USD for XRO's USA based team, but with the added costs such as health insurance plans etc.

[POSSUM THE CAT]

Zaphod At those rates are you employing trained Monkeys. Daughter thinks $85.00 per hour is petty cash for senior developers

[Zaphod]

Zaphod At those rates are you employing trained Monkeys. Daughter thinks $85.00 per hour is petty cash for senior developers

Try searching for the average salaries for developers in NZ - that should give you a good guide. To earn $176k+ as your daughter has quoted as being petty cash, you would need to either be a contractor or in a highly specialised field (e.g. SAP Developer).

[CJ]

Interesting read for anyone investing in Cloud/SAAS companies: http://techcrunch.com/2013/03/23/gro...ne-else-do-it/

I am not all the way though it but points 4 and 5 seem relevent to Xero.

For those not understanding the recent spike in XRO shareprice as US investors read point 4 - Paraphrased: "It doesn't matter if you pay 50% to much as it will catch up in 6 months".

[CJ]

And what happens when the price dives because the company never makes a nickel? Then you paid 100% too much!

I out at the moment as well. Just using that document to explain the rational of US investors. If they are taking a VC type approach, they only expect 20-30% to do better than break even and make their money when one hits it out of the ball park.

If you were in Xero from day one, then it would count as hitting it out of the ball park - currently over 10x return. At current prices, I dont see it going 10x again, at least not for a long time, even if successful.

[Toasty]

C'mon Moosie. When is the collapse happening? It seems to be stalled at the current price but plenty of activity. Waiting on results maybe? What if the customer numbers support the whole growth theme. What do you think might happen?

[CJ]

So you're telling me those future numbers are not already priced in at $11 a pop? That means you believe there is plenty more upside short-medium term, correct?

If there next release of customers justifies the current high price, then the SP probably will increase based on the next expected increase in numbers (ie. one step ahead)