Xro - xero

[Shore]

Wow - has anybody noticed how much Xero are plastering the interwebs with their banners? They're everywhere!

[Harvey Specter]

Wow - has anybody noticed how much Xero are plastering the interwebs with their banners? They're everywhere!Thats just Googles advertising algorithms assuming you are interested in XRO. I get it all the time when I do a bit of internet research on a company.

[Casino]

Xero gearing up for 2104 OZ roadshow!!
http://www.itwire.com/it-industry-news/strategy/62943-xero-gears-up-for-roadshow

You have to give these guys credit for how they have turned boring bean counting software into a social happening.

[Hawkeye]

http://www.nbr.co.nz/article/myob-hiring-spree-xero-rod-drury-ck-p

[Shore]

https://nzx.com/companies/XRO/announcements/246557

Good to see the cash burn slowing up.

[winner69]

https://nzx.com/companies/XRO/announcements/246557

Good to see the cash burn slowing up.

What - rate of increase you mean? Still higher than previous quarter

Compared to same quarter last year receipts up $7.9m while outgoings $16m

So almost spending $2 to sell $1 .....but heaps more of bucks in the future eh

[winner69]

If the Receipts line is indicative of revenues the 80% annual growth rate is being maintained

Good stuff

[Harvey Specter]

If the Receipts line is indicative of revenues the 80% annual growth rate is being maintainedIts good that that has been maintained. This quarter will be interesting to see if their US push is starting to show.

[winner69]

Its good that that has been maintained. This quarter will be interesting to see if their US push is starting to show.

Wouldn't some if that come through in December quarter?

[Shore]

Yeah, if I'm honest, I expected a little bit more in terms of growth after the huge media attention that resulted from the capital placement and the subsequent share price rise. It would seem, at least from a very high level, that all of that hasn't had an impact on the forecast 80% growth rate?

[Harvey Specter]

Wouldn't some if that come through in December quarter?Most people would start a new accounting package at the start of the financial year. The standard US balance date is 31 December so you would commence from 1 Jan. You may set it up a bit before but if you go through an accountant, they will normally arrange the 1 month for free.

The quickbooks conversion service was only released just before christmas so that would also be a driver for change. I think Payroll was also announced quite late in 2013??

[winner69]

Turmeric ......what you think of the numbers you no doubt have punched into a spreadsheet

Only 6 quarters of cash flow but essentially have a few half year figures to compare.

Annualised outgoings now about 125m ......still growing?

Revenue / receipts annual run rate about 80m and growth at +80%

Quick sums - profitable in 3 years and then it all go

So even at 40 bucks Xero only 20 times some future years earnings

[Dentie]

Turmeric ......what you think of the numbers you no doubt have punched into a spreadsheet

Only 6 quarters of cash flow but essentially have a few half year figures to compare.

Annualised outgoings now about 125m ......still growing?

Revenue / receipts annual run rate about 80m and growth at +80%

Quick sums - profitable in 3 years and then it all go

So even at 40 bucks Xero only 20 times some future years earnings

So Winner, if I am considering investing in XRO for dividends and have to wait another 3 years before that may happen - can you give me your best assumption/guidance on what I may have to pay per share at that point?

Based on the historic SP growth to date - I was hoping it wasn't going to be more than say $90 - $100 per share?

Cheers

[Dentie]

By the way, loving Dentie's SP prediction. After all the impending crash/bubble comments he's made in the past I'm hoping this time he may actually be right on XRO! ;) And in all seriousness, 3 years down the track I wouldn't be surprised if the SP is $90 to $100....Time will tell I guess!

Ha...I thought that would unearth a comment from you Mr T...:D

I'll continue watching with interest over the next 3 years. I've been thinking about why they have been in a hurry to rack up the losses - possibly only for tax purposes for when they do start to make a profit. With no tax to pay for a while, that should give some great dividends for the shareholders. Mind you, they might want to retain the profits for R&D.

I see in yesterday's paper sales are up 80% for the year ... costs up 100% for the year ... and the firm is valued at circa $5.3 billion. So, does that mean in 3 years time when the profit starts, it should be valued at say $12 billion?

[Harvey Specter]

So Winner, if I am considering investing in XRO for dividends and have to wait another 3 years before that may happen
Why would they be paying dividends in 3 years. Even if they are cash flow positive, they will still reinvest in growth, or if they do want to distribute cash, on market buy backs will be more efficient. They have too many losses, and overseas shareholders for dividends to be efficient.

[Casino]

I think somewhere between your last and current estimate.


No problem. A numbers update should be in the making soon me thinks. Hopefully 300k mark!

[winner69]

is it 6 or 5 mate? The earlies I have is the report for the period ending Dec 31 2012. Is there one for the previous quarter as well?

Right you are mate ..... only 5

I was counting the YTD totals - the Sep 12 ytd calculated from the December report

Reported revenues tend to be slightly higher than cash receipts

[Casino]

Mmm, have downgraded a bit since seeing ASX 4C Appendix. Cheers.

They added at least (but not a lot more than) 30k in the quarter that just ended --> 241k

That's down from adding 13K in September but understandable given the seasonality of the product. Given a good Jan/Feb in the US and a successful Xerocon, they should easily add 40k this quarter --> 280-285k or 80% customer growth for the year ending in march.

[winner69]

Mmm, have downgraded a bit since seeing ASX 4C Appendix. Cheers.

What on that report made you 'downgrade' your numbers

Receipts still up 14% on previous quarter which suggest revenue growth to be 80% plus this year following the 100% plus last year

You wouldn't want to start thinking growth decay rates with XRO yet would you

Rod not worried .... he was out surfing today

[winner69]

I reckon 292,458 from my trusty spraedsheet

Would have been 292,459 if mate hadn't terminated XRO because it was so useless

Maybe churn is not unusual for the beautiful accounting software

[Casino]

How do you get that number mate? You dividing the increase in receipts by an average of $75 per customer?

Yeah it's a shame that we need to second-guess the numbers, which is to some extent pointless. I figured that customer numbers must have grown at least by 14% if revenue did.

[Casino]

Yeah, but I guess it's a product of being listed on different exchanges. Cash flow is for the ASX right? I think XRO are pretty reasonable at getting their numbers across. Maybe quarterly updates would be better. But we will get an update soon.

Will certainly be revising my number prediction down by a bit. All very dependent on how well they have kicked into gear in the US though.... Last quarter a little weaker than I had hoped based on cash flow!

Ironically, all accounting solutions are shocking with numbers. To me it seems ambitious to hit let alone exceed the 80% revenue growth forecast. Here's the good news: They have 220m in the bank.

[winner69]

Judged by todays price action didn't the market like the look of those numbers on Friday?

[Xerof]

Judged by todays price action didn't the market like the look of those numbers on Friday?

or more likely the FB analysts commentary today saying he values them between $21 and $32?

[Shore]

It's pretty pathetic volume, so I think it's more a fact that the company is just entering its limbo period between news cycles where people slowly start to take back some profits and the buyers dry up a bit. If they're hitting their growth rate (which it appears they are) then the story remains the same as it did 6 months ago.

[Casino]

Looks like the competitor struck a nerve with its super bowl ad.

[winner69]

Looks like the competitor struck a nerve with its super bowl ad.

Just beautiful
http://www.youtube.com/watch?v=xPzQaEENGes


Jeez Xero could have afforded a Superbowl ad with their $220m

[Harvey Specter]

Just beautiful
http://www.youtube.com/watch?v=xPzQaEENGesmmm - I think over 85% of the superbowl veiwers would have 'switched off' mentally well before the end of the add.

If you are going to have an ad completely off topic, at least go funny: http://www.youtube.com/watch?v=zl0zw1YVZd4

[In4a$]

Just beautiful
http://www.youtube.com/watch?v=xPzQaEENGes


Jeez Xero could have afforded a Superbowl ad with their $220m
Ya think they would have aleast got a spread sheet in there somewhere ! hope XRO do better adds

[couta1]

Not a pretty sight looking at the size of my red arrow beside XRO on my portfolio,is there a prize for choosing the worst entry price?

[Casino]

Game was all but over at half time anyway. Bet ya people that forked out all that cash for superbowl adds were a bit pissed!!

Ha - that's bad luck. I think super bowl ads are quite effective because people watch them on youtube and talk about them worldwide. That's not necessarily a bad thing for Xero if it gets more people into the cloud. Intuit has released a series of new ads for their products:

http://www.youtube.com/watch?v=LeXK8NLr0ts

the one that caught my eye was this one:

http://www.youtube.com/watch?v=Kyanuq0F-os

I think their turbotax ads are much funnier tho:

http://www.youtube.com/watch?v=2EHujuY9q-E
http://www.youtube.com/watch?v=veBYze8C6VQ

[couta1]

Its at nearly $40? What price did you pay to be in the red for Xero?
$42.50 unfortunately

[whatsup]

Decent mini dump on close, IMHO Fris numbers do not stack up and until the next lot are known there may be a retrace =s weakness!

[couta1]

Break of $40 with buyers nowhere in sight. Might see some carnage today as the panockers rush for the tiny exits.

Hang in there couta, the story hasn't changed!
Will do have had plenty of practice with DIL,as you were saying above looks like a Macro environment problem at the moment not just Xro being affected

[Shore]

It's certainly relevant when weighing up the choice of taking a bath right now, or waiting a few months (?) until the SP returns to his buy price (which, I think most on here would agree, is more than likely).

[winner69]

Break of $40 with buyers nowhere in sight. Might see some carnage today as the panockers rush for the tiny exits.

Hang in there couta, the story hasn't changed!

So buy the dips is the way to go

[tosspot]

If I was trading this I would of sold yesterday, Its shaping up just like the last number of quick dips xero does, can potentially see it flurry back to $30 within the next few days and then build its way back up like it has in the past.

[couta1]

It's certainly relevant when weighing up the choice of taking a bath right now, or waiting a few months (?) until the SP returns to his buy price (which, I think most on here would agree, is more than likely).
That's my current thinking as not keen on taking another large bath right now after my Chorus loss,so what started as a trade has now become a long term play by the looks

[Shore]

That would be my inclination too. If the story had changed, or if something dramatic & negative had happened in the marketplace, then yes I'd be looking to abandon ship. But you just need to look at the history of Xero's SP over the last 2 years to see the trends, and I think you can take a good deal of comfort that the SP will return back to your buy price - probably sooner than you think.

[couta1]

That would be my inclination too. If the story had changed, or if something dramatic & negative had happened in the marketplace, then yes I'd be looking to abandon ship. But you just need to look at the history of Xero's SP over the last 2 years to see the trends, and I think you can take a good deal of comfort that the SP will return back to your buy price - probably sooner than you think.
Thanks Shore,I think I should start compiling a little book titled Common mistakes made by the over enthusiastic on the share market,could be popular:cool:

[Santiago]

If I was trading this I would of sold yesterday, Its shaping up just like the last number of quick dips xero does, can potentially see it flurry back to $30 within the next few days and then build its way back up like it has in the past.

If it goes that far I'm buying again. I can see it settling in the mid-30s for a while. Probably a good time to buy. The next run might take it into the high 40s, with the one major unknown being what happens to the markets generally.

[Shore]

That's not my understanding of it (although please correct me if I'm wrong couta1). My view is that he bought in at that level with an expectation it was making a run to the First NZ capital target price. Personally, I think it will still get to that target price -only now it's just going to take a bit longer. Twice now the SP has gone over the $40 mark, and there did seem to be a bit of support for it on its recent tilt before this fall. Yes, this fall is significantly delaying couta1's original plan, but I don't think that outcome of that plan has changed. I think he's just being fluid in his decision-making - nothing wrong with that.

[Shore]

& on another note - what is that Andrew Harvey-Green from FB smoking? He said current SP had a 50% USA market share built into it??? 50%?????

[winner69]

Tempting to jump in and buy 5k shares and see what happens but hard to get the head around paying $42 a share and probably get a retraction after I buy them and if the up coming numbers ain't as good as market expectations could be waiting a long time to get any profit,hmmm tough decisions, would not be long term hold


Was this your real story then couta

[couta1]

That's not my understanding of it. My view is that he bought in at that level with an expectation it was making a run to the First NZ capital target price. Personally, I think it will still get to that target price -only now it's just going to take a bit longer. Twice now the SP has gone over the $40 mark, and there did seem to be a bit of support for it on its recent tilt before this fall. Yes, this fall is significantly delaying couta1's original plan, but I don't think that outcome of that plan has changed. I think he's just being fluid in his decision-making - nothing wrong with that.
Shore this is a correct summary,I'm not really a great TA type or trader for that matter although I have had some very successful trades but lean heavily on the underlying fundamentals of a company,the trouble with exiting at the moment without any fundamental change in the company is how do you set your exit price when it could all change in a week and exceed your purchase price leaving you with a large loss?

[blackcap]

Generally in my experience traders that cannot sell losing trades (ie quit when the trade does not perform as they expected) are losing long term.

[Casino]

Couta, I feel I need to say something that will cheer you up but don't hold me accountable. Given how important the Jan/Feb period is to the US market, I cannot imagine that Xero will forgo a publicity/marketing stunt now. They sit on 220m and may pull a rabbit out of their hat timed with the Xerocon, which could be your opportunity to exit. Again I am not a trader and this is not an advice, just something to weigh in.

[whatsup]

Decent mini dump on close, IMHO Fris numbers do not stack up and until the next lot are known there may be a retrace =s weakness!

$37.00 OPEN and on the way down, imho fundermentals have to prevail with XRO eventually.

[Shore]

Some very tempting buying opportunities presenting themselves....

[couta1]

I'm going to guts this one out at the moment, i think Macro environment affecting most stocks at the moment by the looks,thanks to all for help

[blackcap]

I'm going to guts this one out at the moment, i think Macro environment affecting most stocks at the moment by the looks,thanks to all for help

Thats ok couta1, but what do you do if the macro environment gets worse? BTW I do not think it will and think this is a blip (DOW and Europe) but with markets you never know and they are unforgiving. For what its worth, if you are buying for a trade, you must have an exit strategy and just saying "I will hold for the long term now" is losing long term unfortunately.

[couta1]

Thats ok couta1, but what do you do if the macro environment gets worse? BTW I do not think it will and think this is a blip (DOW and Europe) but with markets you never know and they are unforgiving. For what its worth, if you are buying for a trade, you must have an exit strategy and just saying "I will hold for the long term now" is losing long term unfortunately.
Yes I still have a lot to learn in this area

[whatsup]

Some very tempting buying opportunities presenting themselves....

LOOKS LIKE rout is over for the short term, good trading for the brave.

[In4a$]

LOOKS LIKE rout is over for the short term, good trading for the brave.
I got out of XRO yesterday with small profit, might get back in this avo, not sure if I am brave enough though, with thursday a NZ holiday price might not start climbing till next week. IMHO

[In4a$]

XRO buyers are back, hopefully for couta1 we will see $43 before it drops again
Disc: holding again

[Santiago]

Coincidently there was a 5000 share sell offer at 38.50 which went through today. Made me wonder if Couta had decided to bail?? Either way nice rebound and seems that XRO is a traders paradise right now (or it's proxy GEO ;))

Seriously, it's like rinse and repeat with XRO right now. Down she goes, up she comes. Must be tempting to trade the dips, bearing in mind an overall upward trend. I'd even say that the next announcement has been pre-cooked with the recent cash flow info and market price enquiry- 80% locked in...

[couta1]

Coincidently there was a 5000 share sell offer at 38.50 which went through today. Made me wonder if Couta had decided to bail?? Either way nice rebound and seems that XRO is a traders paradise right now (or it's proxy GEO ;))
Not me tumeric,im sticking with it,why lose 20 k for no reason?

[Copper]

Not me tumeric,im sticking with it,why lose 20 k for no reason?
I'm no real mathematician but that's pretty impressive investment.Good on you.All the best.

[steve fleming]

Interesting perspective from the accounting coal face

Wazza from the case study says two years ago XRO the only choice, nowadays it’s a more competitive market place

http://www.brw.com.au/p/tech-gadgets/how_xero_know_when_myob_is_more_zs6kYfldQfv5wyake0 St6N

How to know when MYOB is more or less than Xero
Published 05 February 2014 12:20, Updated 05 February 2014 12:30
The arrival of cloud-based accounting systems has busted open a space long dominated by incumbent MYOB, but picking the provider which suits your business best comes down to more than price.
“They’ve all got their good points and you need to be across more than one,” says Mary O’Driscoll, a principal in Crowe Horwath’s business advisory practice.
The four main players in the Australian market are MYOB, New Zealand’s fast-growing born-in-the-cloud Xero, global giant Intuit with Quickbooks, and Reckon, the former Australian distributor for Quickbooks which now has its own cloud-based offering.
Picking an accounting system is a vital yet often baffling decision for new businesses, O’Driscoll says, particularly as the players seek to attract start-ups with free trials that can convert into paid subscriptions when transactional levels increase.
The jaw-dropping performance of Xero shares (http://www.brw.com.au/p/investing/craig_winkler_xero_shares_now_worth_U3T8jC5RVzk3eD xm1FUt3I)reflects “the fundamental change that cloud-based accounting and bookkeeping is making to the way we do business,” O’Driscoll says.
She acknowledges that Xero is “ahead of the rest” when it comes to compatability with smartphones and tablets for entrepreneurs on the go.
However Crowe Horwath - which is a ‘platinum partner’ for Xero with more than 1000 clients using the software, but also a partner for MYOB in transitioning clients to its cloud-based AccountRight Live and Live Accounts platforms - regularly recommends a range of systems to businesses based on their needs.
“For example if you want inventory tracking, the Xero product on its own would not be sufficient – you’d need an add-on, whereas that is included in MYOB’s off-the-shelf product,” O’Driscoll says.
There is no “expensive” provider, she explains, but there is money to be saved in packaging add-ons tailored to your firm’s individual needs.
“MYOB also offers more a hybrid model. You can sync it and choose to use it offline, which suits some businesses. Obviously you can’t do that with a cloud-only solution.”
O’Driscoll says Intuit is “a bit behind in terms of its cloud product” but once localised it will offer a global heft the others lack. An example of its innovation is Quickbooks Financing, which uses the cloud-based data it already holds on its customers to try and give banks a better measure of their creditworthiness (http://www.brw.com.au/p/business/explains_your_accounting_software_k1MEdrnYbK7QgGK6 ZWIhQI).

An MYOB to Xero case study

The choice between accounting systems was a lot easier in March 2012, when WA’s Caretech switched from MYOB to Xero, according to managing director of the wholesaler to pharmacis and health stores, Warwick Wilson.
“These days the competition’s really hotted up but back then Xero presented a unique opportunity for us,” Wilson says.
“MYOB was a specific bookkeeping system, and expensive in the sense of continually paying for upgrades. It was hard for newcomers to understand and there were no extras for sales reps back then.”
Wilson says buying Xero allowed him to redeploy “two or three” fulltime equivalents away from the books and into sales roles that can grow the business.
Cloud-based accounting in general has saved him time and money and presented opportunities to improve, for example through diarisation of all calls to and from customers and sales reps.
“The relationship with our accountant was behind the times, they were just glorified bookkeepers and if you made a mistake, you’d have to recreate everything. It was just silly compared to now where you can all see what everyone’s doing. They can be true management accountants.”

[winner69]

Up more than 3% in ASX today bodes well NZ tomorrow

[Santiago]

I think you're totally correct Turmeric in saying XRO is susceptible to outside forces. Until it had its own concrete fundamentals to back up the share price, it'll be volatile- equally upwards and downwards. A trader's dream. For long term holders, some fortitude is required...

[couta1]

Hi tumeric,Wasn't me that was dismissive of Macro forces,actually I thought Xro held up okay myself,I did have an exit price of $36 in my head which is 15% below purchase price and was keeping an eye on it,will go long if need be as I have with DIL but will leave some money in Xro now regardless,the question I have is how much forward growth is actually priced in to current price I hear figures of 2 years bandied around but if numbers are good I can't see it staying below $45 for long regardless of the theories,well see I guess

[Casino]

Hi tumeric,Wasn't me that was dismissive of Macro forces,actually I thought Xro held up okay myself,I did have an exit price of $36 in my head which is 15% below purchase price and was keeping an eye on it,will go long if need be as I have with DIL but will leave some money in Xro now regardless,the question I have is how much forward growth is actually priced in to current price I hear figures of 2 years bandied around but if numbers are good I can't see it staying below $45 for long regardless of the theories,well see I guess

Mr Harvey-Green said the current share price assumed Xero will achieve a market share of more than 50 percent in the United States and more than 9 million customers overall.
http://www.radionz.co.nz/news/business/235000/xero-risks-in-focus-analyst

Must be a bad typo or miscommunication. I think Xro will eventually settle for a P/E=20. So for a Mcap of 5b we need 250m worth of profit on perhaps 300m of revenue? Assuming current growth rate, it will take a bit more than 2 years. I would say the market has priced in 1m customers.

[Santiago]

... the first lot of US numbers coming out to March 31 will be very interesting...

Any idea where this came from? I was half expecting something out around now.

[Shore]

I would have thought we'd get an update on numbers at Xerocon (which is only 2 weeks away).

[Harvey Specter]

Mr Harvey-Green said the current share price assumed Xero will achieve a market share of more than 50 percent in the United States and more than 9 million customers overall.
http://www.radionz.co.nz/news/business/235000/xero-risks-in-focus-analyst

Must be a bad typo or miscommunication. I think Xro will eventually settle for a P/E=20. So for a Mcap of 5b we need 250m worth of profit on perhaps 300m of revenue? Assuming current growth rate, it will take a bit more than 2 years. I would say the market has priced in 1m customers.Maybe his market share is based on existing users of other products so is a more verifiable number??? I think Xero uses all SMB, even those not using an accounting program, but should be using Xero as it would make their life so much easier. THe issue is who verifiable is that number???

I think your profit market is abit high. 250m profit on $300m of revenue would be exceptional - a NP% of 83%. Salesforce has Revenue of $3b and still makes a NPAT loss of $270m. Strip out sales and marketing completely and you still have a NP% of 44%. (note: Market cap of $37B so a P/S of 12 though clearly more established than Xero with a revenue growth of 'only' 35%pa over the last two years.
http://www2.sfdcstatic.com/assets/pdf/investors/fy13_annual_report.pdf

Do you know of another SAAS company which has such a high profit margin?

[Casino]

Maybe his market share is based on existing users of other products so is a more verifiable number??? I think Xero uses all SMB, even those not using an accounting program, but should be using Xero as it would make their life so much easier. THe issue is who verifiable is that number???

I think your profit market is abit high. 250m profit on $300m of revenue would be exceptional - a NP% of 83%. Salesforce has Revenue of $3b and still makes a NPAT loss of $270m. Strip out sales and marketing completely and you still have a NP% of 44%. (note: Market cap of $37B so a P/S of 12 though clearly more established than Xero with a revenue growth of 'only' 35%pa over the last two years.
http://www2.sfdcstatic.com/assets/pdf/investors/fy13_annual_report.pdf

Do you know of another SAAS company which has such a high profit margin?

Conventional wisdom says that software in general and particularly saas are highly scalable and profitable so I wanted to be generous. I think margins will erode given the fierce competition. Wave is only days away from releasing reconciliations, which has been their biggest pitfall to date. Gem accounts is free for small and micro businesses. Reckon one is due to launch on Monday and starts at 5$ per month I think. MYOB wants to release a cheap product for micro businesses. It's a very crowded space but Xero seems to be bouncing back from a slow December if you believe google trends:

http://www.google.com/trends/explore#q=xero%20-shoes%2C%20quickbooks%20online

[artemis]

According to the below link there are 28m small businesses in the US, and 22m of these are sole proprietors. They define a small business as under 500 employees so that includes what we in NZ would call medium I guess. It would be interesting to understand how many sole proprietors would go for an accounting package rather than a couple of spreadsheets. XRO does have a very small offering for micro businesses but I don't think I have seen any numbers for that.

Understanding the mix would help with assessing market size. I am sure XRO has done these numbers.

http://www.businessinsider.com/infographic-the-state-of-us-small-businesses-2013-9?IR=T

[Harvey Specter]

According to the below link there are 28m small businesses in the US, and 22m of these are sole proprietors. They define a small business as under 500 employees so that includes what we in NZ would call medium I guess. It would be interesting to understand how many sole proprietors would go for an accounting package rather than a couple of spreadsheets. XRO does have a very small offering for micro businesses but I don't think I have seen any numbers for that.

Understanding the mix would help with assessing market size. I am sure XRO has done these numbers.

http://www.businessinsider.com/infographic-the-state-of-us-small-businesses-2013-9?IR=T500 would be considered a large business in NZ (probably over 50 infact).

I use xero cashbook ($10pm) for two companies I have. I have no employees and very few transactions but the time saved compared to the spreadsheet I use to use, plus the fact it is upto date, links with Sharesight makes it worth it.

[Santiago]

I think we've hashed through this several times now on this thread. Some posters on here were suggesting we will see a numbers update sometime soon (this type of talk was initiated at the end of last year). I've tried to point out several times that while this is a possibility the only time XRO consistently reports numbers are in their half year and full year reports. Anything else in between has tended to be milestone reports and should be largely considered random in timing. The next update you should expect is their half year report which should be out early April. You might get something before that, but predicting the timing is a bit fruitless if you ask me....

If I have gotten this wrong somehow please correct me.

Yes it has been hashed through. I read your comment as being extremely confident that something would come out on 31 March, and definitely not before, and thought perhaps you knew something. My bad.

While they have released random milestone numbers, I reckon they might now become a bit more selective and predictable in the way they communicate. They no longer need to attract funding and interest by announcing every minor milestone.

[winner69]

Rod in Oz with Key's little jaunt

Trip ruined with a little stoush with the NBR again and Rod calling it a **** company on Twitter

[skid]

Hi tumeric,Wasn't me that was dismissive of Macro forces,actually I thought Xro held up okay myself,I did have an exit price of $36 in my head which is 15% below purchase price and was keeping an eye on it,will go long if need be as I have with DIL but will leave some money in Xro now regardless,the question I have is how much forward growth is actually priced in to current price I hear figures of 2 years bandied around but if numbers are good I can't see it staying below $45 for long regardless of the theories,well see I guess

Good to have a stoploss--with all due respect there are plenty of reasons the SP could go (well)below $45,especially when you think of all the internet gaints out there that could conceivably come up with a similar product of their own if XROs success makes it an attractive money maker.
This is a very different company than the ''bricks and mortar'' outfits like Ryman that have something to fall back on if things go a bit pear shaped.
Good to stay focused and optimistic but
I think its important to keep the feet on the ground also.
Once in a while its good to question things like ''do you think there are brains over there in Google -yahoo-Microsoft-etc that are capable of making a product that could take market share away?
Good advice about keeping fingers on the pulse of outside markets--Xro followed US markets this week pretty closely.

[Toasty]

Rod in Oz with Key's little jaunt

Trip ruined with a little stoush with the NBR again and Rod calling it a **** company on Twitter

Bit of a shame that as I always felt that Chris Keall did quite a reasonable job of reporting on the company. The comment system is broken though. Too many weird detractors without substance.

[Harvey Specter]

I can't seem to find what you are referencing Winner? Maybe Rod has removed the tweet? Also which article are you talking about on NBR? Cheers.Rod asked Chris for a copy of the article. Someone replied that surely he could afford a NBR sub to which Rod replied, just because you can afford dung, doesn't mean you buy it.

The article is the latest one, which now has Rods comments. Its behind the paywall so I haven't read.

[Toasty]

OK gotchya, cheers. So this one by the looks:
http://www.nbr.co.nz/opinion/analyst-gets-nervous-about-xeros-prospects-crucial-us-market-ck

Will have a read now.

Cheers.

Those of us too cheap to spring for a subscription would love to know the gist of it......:)

[Everwood]

Nothing of real interest IMHO. Just a summary of Woodward Partners rating on XRO (back in Nov 2013) For Bars more recent update (http://www.nbr.co.nz/article/xero-rated-underperform-analyst-says-ramp-expenditure-underway-ck-p-151369)(last week, both of those two analysts downgraded XRO), contrasted by FNZC buy rating and target price of $47.5 (from November 2013) and Rod's response. Nothing new to be honest. Rod's reply is simply that XRO are comfortable with where they are at and their strategy, have enough gas in the tank to be successful in the US, that they don't underestimate Intuit and points to XRO beating MYOB in OZ and Sage in the UK (in the online area) implying they will be successful in the US too. He says they are confident that in 2 years they will have made good progress in the US and they are not seeing any surprises or anything that gives them any real concern!

Thank you for the gist of the article.

[winner69]

A German accountant makes it to the Winter Olympics. XRO has changed so many life's says Rod on twitter

Anybody know the story behind this?

[Shore]

That's a significant hire if you ask me and clearly signals their intentions (re a US listing).

[Harvey Specter]

That's a significant hire if you ask me and clearly signals their intentions (re a US listing).THat has always been on the cards - they need US$100m revenue to do that. It does signal a higher focus on the US which is required. Bodes well. Markets liked it - up $1.

[couta1]

Yup I agree! Sparked some SP action as well! NASDAQ listing later this year I would say!

Xero taps ex-Microsoft CFO Liddell as chairman, former PayPal exec Karpas to lead US unit (http://www.sharechat.co.nz/article/867375a4/xero-taps-ex-microsoft-cfo-liddell-as-chairman-former-paypal-exec-karpas-to-lead-us-unit.html?utm_medium=email&utm_campaign=Xero+taps+ex-Microsoft+CFO+Liddell+as+chairman+former+PayPal+ex ec+Karpas+to+lead+US+unit&utm_content=Xero+taps+ex-Microsoft+CFO+Liddell+as+chairman+former+PayPal+ex ec+Karpas+to+lead+US+unit+CID_a92271b0fc7c02e4813c 1a172f467cf6&utm_source=Email%20marketing%20software&utm_term=httpwwwsharechatconzarticle867375a4xero-taps-ex-microsoft-cfo-liddell-as-chairman-former-paypal-exec-karpas-to-lead-us-unithtml)
Yee har some action I was beginning to feel lonely over here at ground Xro holding my red arrow:cool:

[Harvey Specter]

Sparked some SP action as well! NASDAQ listing later this year I would say!I have previously looked into this in more detail but this provides a good summary:

http://www.investopedia.com/ask/answers/121.asp

They need revenue of over US$90 (incorrect said $100m above though that was probably my mind default to NZD) as they dont meet either of the first two standards. I dont think they will get $90m in the year to march 2014 so they will have to wait till after the year to March 2015 (not sure if they can do part year accounts to prove they meet the criteria).

Or do you forecast revenues over US$90 for this year?

[Casino]

I have previously looked into this in more detail but this provides a good summary:

http://www.investopedia.com/ask/answers/121.asp

They need revenue of over US$90 (incorrect said $100m above though that was probably my mind default to NZD) as they dont meet either of the first two standards. I dont think they will get $90m in the year to march 2014 so they will have to wait till after the year to March 2015 (not sure if they can do part year accounts to prove they meet the criteria).

Or do you forecast revenues over US$90 for this year?

Wouldn't it go by the US financial year, which is Oct-Sep?

[Santiago]

Wouldn't it go by the US financial year, which is Oct-Sep?

Yep, I'd say so, and I reckon they'll meet that 90m threshold by Oct this year

[Harvey Specter]

Wouldn't it go by the US financial year, which is Oct-Sep?US year end is normally December isn't it? Cant say I have ever worked on a Oct/Sept balance date co. I am sure they use Dec just to piss off accountants in the Southern Hemisphere who they require to complete their year end by working day 3 (ie 3 Jan depending on weekends as they dont count the NZ holidays)

I assume it would be based on audited accounts so whatever year end the company has. Pretty sure XRO haven't changed from the standard NZ March balance date.

[Casino]

I couldn't find any detailed information but as it seems, it doesn't have to be the US government's fiscal year.

[JamesST]

I'm pretty sure you don't have to have any revenue if you meet minimum market cap and asset requirements.
Fantastic hires. Definitely gearing up for Nasdaq I'd say.

[JamesST]

Found some better info. Page 6, Standard 4( Assets with Equity)
https://listingcenter.nasdaqomx.com/assets/initialguide.pdf

[JamesST]

I reckon Rod's been dreaming of ringing the opening Nasdaq bell since he was a kid and will be pushing for it even sooner than a menagerie of rabid sharetrader posters. Ring a ding ding!

[Harvey Specter]

Found some better info. Page 6, Standard 4( Assets with Equity)
https://listingcenter.nasdaqomx.com/assets/initialguide.pdfI don't remember standard 4 - is it new or did I over look it?

[Shore]

Interesting about Standard 4 - do we infer from that they could go right now?

One side of me thinks that they quoted the US$100m revenue figure simply to give themselves time to ramp up in the USA and get some traction. While it makes a good deal of sense to list there, it only will pay off if they have are starting to get movement in terms of brand and customer numbers. I'd imagine timing is everything and they'd want to make sure they were in a good position to kick on from the publicity that a listing might generate. I guess the encouraging thing from those recent hires is that all is on track, numbers must be looking good, and the plan is one stop closer.

[Harvey Specter]

Interesting about Standard 4 - do we infer from that they could go right now?

One side of me thinks that they quoted the US$100m revenue figure simply to give themselves time to ramp up in the USA and get some traction. While it makes a good deal of sense to list there, it only will pay off if they have are starting to get movement in terms of brand and customer numbers. I'd imagine timing is everything and they'd want to make sure they were in a good position to kick on from the publicity that a listing might generate. I guess the encouraging thing from those recent hires is that all is on track, numbers must be looking good, and the plan is one stop closer.It does look like they qualify, the only exception would be if 'cash' was excluded from the total assets calc but it doesn't seem to be.

The reference to $100m may just be a market traction thing given the stage they are at (ie. past VC investment).

[Casino]

I didn't see/notice a fourth listing standard when I looked into it a while. So it might be new but if so not very well advertised.

[luigi]

Wouldn't it make more sense to list when they are also looking to raise more capital? Or do posters think it's purely a marketing exercise?

My read on the new hires is that its a confirmation of good (better than expected?) uptake in the US and they're trying to build on that momentum.

[Harvey Specter]

Wouldn't it make more sense to list when they are also looking to raise more capital? Or do posters think it's purely a marketing exercise? NOt necessarily. They could list with no new shares which would enable those that have already invested to sell their shares. The VC's will want an exit ast some stage and they own far to much to be able to sell easily on the NZ market.

[blackcap]

Xero to be added to the NZX10 Index (Xero to be added to the NZX10 Index)

I do not expect this to move the price one way or the other. If it does it would signal that the market is more inefficient than I expect it is. This has been known for a while now and "should" be factored into calculations.

[blackcap]

Was it you that was went short on XRO blackcap? If so, do you mind me asking if you are still short?
Yes it was me that went short, but I bought back a long time ago. So no I am not short and do not care which was the price moves. My comment about inclusion in the NZX10 is that this is signalled a long time ago and in an efficient market should be factored in so "such news" should not be a price mover. If it is then there is money to be made by purchasing before the announcement (we all know it is coming and can work out when) and then sell on the fact.

[Santiago]

For some of us that have been in XRO for a while now, when we first invested in XRO I don't think any of us in our wildest dreams would have expected come Feb 2014, XRO would be in the NZX10! So happy days, is really all my post was indicating!

Disagree. I had a wild dream that this would happen, but then dismissed it as mad. But I had it nonetheless. What a moment.

[couta1]

My only dream is that the price will exceed my buy price for longer than a few hours:cool:

[winner69]

No comments for a few days

Shareprice must be drifting a bit

[Harvey Specter]

No comments for a few days

Shareprice must be drifting a bitcause and effect?

[Toasty]

XeroCon up in Auckland from tomorrow. Always nice to see a bit of arm waving and applause etc.

[couta1]

Xero exceeded 250,000 customers end of January.
Was this what was expected till end Jan,talk of 300k previously,is that till end of March expectations?

[Shore]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11206150

Good interview with Rod, and good effort from interviewer to get US listing news haha

[couta1]

Initial response to update looks muted

[David Hardman]

Cloud Payroll company valued at US$100-150m

http://techcrunch.com/2014/02/19/cloud-based-payroll-app-zenpayroll-raises-20m-from-general-catalyst-and-kleiner-at-a-100m-plus-valuation/

[couta1]

Possibly (it is in line with my own personal expectations) however given you havent been around in XRO for that long Couta it is worth pointing out that historically announcements of this nature have taken time to be reflected in the SP (often days even weeks). Not saying the SP is going to take off or anything but I wouldn't be surprised if it takes a bit of time to move. (notice it does seem to be creeping up a touch over the last little bit). The announcement + Xerocon might see a few more retail investors add more over the next few days.
Cheers tumeric

[Casino]

Numbers based roughly on the following Jan 31 estimates:

NZ 94,000; OZ 97,000; UK 36,000; US 25,000; TOTAL 252,000

Are these your estimates or did they break it down somewhere?

[Casino]

I find 90k NZ customers hard to believe. They had 85500 at the end of September. Anyway, I think the share price is divorced from these numbers. Otherwise I would have expected some form of reaction (up, down, spike in volume) in response to Intuit numbers.

http://investors.intuit.com/files/doc_financials/2014/2Q/Q2FY14%20Fact%20Sheet%20FINAL.pdf

[Everwood]

I find 90k NZ customers hard to believe. They had 85500 at the end of September. Anyway, I think the share price is divorced from these numbers. Otherwise I would have expected some form of reaction (up, down, spike in volume) in response to Intuit numbers.

http://investors.intuit.com/files/doc_financials/2014/2Q/Q2FY14%20Fact%20Sheet%20FINAL.pdf

They said this on the Xero blog http://www.xero.com/blog/2014/02/xerocon-new-zealand-2014-day-one "We’ve grown to more than 90,000 paying customers in New Zealand"

[Shore]

Maybe it shows maturity from the market? Xero put out a promise, they have the funds and runway to do it, and so the market rocketed them up to $5b market cap. All the good news of late (the quarter million mark, the three big hirings) are all in line with their game plan and already priced in by investors. There hasn't been any volatile jumps in the SP at all which signals to me that the market isn't going to respond irrationally to news already expected in the pipeline. I'm thinking this is the firm base camp (circa $40) until we see major news regarding US numbers or a US listing. Sounds like the UK is really humming too, so maybe some bigger than expected numbers from there might push it up a little too.

[Casino]

They said this on the Xero blog http://www.xero.com/blog/2014/02/xerocon-new-zealand-2014-day-one "We’ve grown to more than 90,000 paying customers in New Zealand"

Thanks for the pointer. If we assume 190k for ANZ, then UK/ROW number must have jumped from 47k to 60k. That's not too shabby if they can maintain that.

[winner69]

Sam Stewart reckons current shareprice implies 3.1 million customers by 2020

http://www.samstewartnz.com/2014/02/18/xero-valued-at-nz5-billion-3-1-million-customers-by-2020/

This blog post was found/linked from Clare Capital ....fooled me

Interesting analysis

[couta1]

Sam Stewart reckons current shareprice implies 3.1 million customers by 2020

http://www.samstewartnz.com/2014/02/18/xero-valued-at-nz5-billion-3-1-million-customers-by-2020/

This blog post was found/linked from Clare Capital ....fooled me

Interesting analysis
So according to this analysis we wouldn't then expect any increase in share price for a very long time,even years?

[winner69]

So according to this analysis we wouldn't then expect any increase in share price for a very long time,even years?
But they going to have even more customers than this one day

There is another analysis on Clare Capital site
http://clarecapital.co.nz/cc-content/uploads/2014/01/Clare-Capital-Xero-Thoughts-20131003.pdf

They sort of say the market is consistently valuing XRO based on the relationship between Revenues and EV (surprised)

If you look at the chart from that article below they have an EV of nearly $30 billion under one of their growth scenarios A SHAREPRICE OF `$235

So couta .... sleep well tonight ..... and never sell your XRO shares until they are over $200

Better bet than SUM I reckon

[couta1]

I love your confidence winner,I think the Indian cricket team could borrow you for a year and pay you a fortune in the process:cool:

[winner69]

I love your confidence winner,I think the Indian cricket team could borrow you for a year and pay you a fortune in the process:cool:

Don't you believe it couta

I think those jokers from Clare did a serious analysis

[couta1]

All good winner,looks a more thorough analysis than others have done,the confidence comment was actually a compliment,cheers

[Santiago]

Reading the last para on page 7, and looking at the chart on page 8, it would appear their scenario 3 is playing out at present. That would indicate, according to their analysis, and using EV as a measure of market cap, that the SP is around double what it should be now, about right for a year from now, and that it should double with each year. Of course, most investors are buying in at elevated prices expecting that level of growth to continue. So, and again with the caveat that this is one group's perspective, the upwards trend should continue, with the usual waxing and waning, but reasonably rapidly. Buy and hold for 2 years... I think the most interesting comment in this research is that Xero is unique for a NZ listed company and the market isn't used to valuing thus sort of proposition. I totally agree. Look to the US for guidance on how these stocks behave.

As as an aside, a friend of mine, small scale investor, based in the Bay Area (SF) just bought in (after the 250000 customer announcement confirmed for him the growth trajectory). His comment was that he'd buy for 40 and sell at 120 in 18 months.

Everyone has an opinion, eh.

[Harvey Specter]

While the assumptions are pretty rough and the analysis very simple, basically what this suggests (to me anyway) is that we will likely see XRO's overall customer number growth falling throughout the rest of this year (dipping below 80% p.a. largely driven by slower NZ growth) before starting to pick up again and taking off from 2015 potentially breaking through 90% p.a. and maybe even back to 100% through 2016 (largely driven by US growth and to a lesser extent OZ and the UK).

Interested to hear others thoughts :)Sounds about right. The key has always been the US market and from this low base, they should be able to maintain 200% for a few years, and then hold above 100%. THat is the metric to be watching for as if they dont hit it, the price support will fall.

[JamesST]

I had a look at the Clare Capital analysis on XRO again last night and the various scenarios, which are each based on different, yet constant, overall customer growth assumptions over time, and it got me thinking a bit more about what might be expected in terms of XRO customer growth over the coming couple of years. On the face of it, it might seem a bit worrying that overall growth is slowing, but I expect this to only be short term, and over the longer term I actually think growth in overall customer numbers will start to pick up quite strongly.

The way I see it, we should not be expecting constant customer growth over the next few years (as per CCs analysis) rather we are likely looking at an inverted bell curve type growth. (see graph below).

The main issue I see for XRO right now is that a large proportion of their customers are NZ based (roughly 35% or 90k out of 250k) however customer number growth in NZ, which was once over 100% p.a. has now slowed to an estimated 35% p.a. and will likely slow even more. In contrast, the fastest growing world region (the US at an estimated 200% p.a.) is coming off a very small base and therefore while in itself is a high growth rate, contributes very little currently to overall customer growth. However over time if this growth can be sustained it will start to contribute more and more to overall customer growth.

So in order for me to try and get a better handle on what might be expected over the next couple of years I set up a pretty simple situation where we expect constant customer number growth by region (NZ 30%, OZ 100%, UK 90%, and US 200% p.a.) and extrapolate this out through to the end of next year to see what that might look like overall.

5544

While the assumptions are pretty rough and the analysis very simple, basically what this suggests (to me anyway) is that we will likely see XRO's overall customer number growth falling throughout the rest of this year (dipping below 80% p.a. largely driven by slower NZ growth) before starting to pick up again and taking off from 2015 potentially breaking through 90% p.a. and maybe even back to 100% through 2016 (largely driven by US growth and to a lesser extent OZ and the UK).

Interested to hear others thoughts :)


Exactly what I think Tumeric.
Will be interesting to see how it plays out. On one hand I think that Xero are entering US with a mature product compared to when they entered AU and UK so potential uptake may be faster.
On the other hand the US is a huge market. It may take longer to get to a 'critical mass'. You may need to break out growth curves in each state as well...

Intuit have been fairly consistently adding about 30k customers per quarter for a while but I notice that took a big jump to 45k customers in the last quarter. Xero aren't too far behind in terms of numbers or customer additions.

Whatever happens with the relative growth rates between Xero and QBO they're both on the way up fast. But Xero's market share can only go up and Intuit's can only go down because they're converting Desktop customers.

I don't think Xero's customer growth will explode in the short term. I think shareholders need to be patient as your graph shows.

[winner69]

Thanks for the pointer. If we assume 190k for ANZ, then UK/ROW number must have jumped from 47k to 60k. That's not too shabby if they can maintain that.


XRO blog says 100,000 in Australia milestone reached today

[Santiago]

The share price is like a homing pigeon right now. Gravitates back to an even 40 every time...

[Casino]

XRO blog says 100,000 in Australia milestone reached today

Is it safe to say that Oz is bigger than NZ now?

[Harvey Specter]

Is it safe to say that Oz is bigger than NZ now?Yes - NZ is above 90,000 (or was it 95). I am sure we will have another announcement soon for NZ hitting 100,000. My guess is + or - 10 days from 31 March 2014 as accountants transition more of their clients over. Especially cashbook clients (low revenue unfortunately) as Xero are doing a push for these with their accounting network.

[Santiago]

Yes - NZ is above 90,000 (or was it 95). I am sure we will have another announcement soon for NZ hitting 100,000. My guess is + or - 10 days from 31 March 2014 as accountants transition more of their clients over. Especially cashbook clients (low revenue unfortunately) as Xero are doing a push for these with their accounting network.

Quite a transition to have Australia as the biggest market. The question now is when the US will overtake Australia. I reckon the US behaves differently as a market, is more demanding and fickle, but also moves with quicker momentum. I'd say it'll be their biggest source of customers within around 18-24 months, or it never will be.

It'll also be be interesting to see if the NZ and Aust markets mirror each other in the inevitable slowdown in customer acquisition. Australia probably still has a fair bit left to run, though. You'd have to think that in the long run half a million in Aust is doable, if they've hit 100k in NZ.

[Toasty]

The view from the other side of the tracks. No research done by me (as usual). I struggle to see how a company as established as MYOB makes a $14 million dollar loss. I know they are retasking their products to become more cloud centric but they still have $240 million in revenue.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11210958

[Harvey Specter]

The view from the other side of the tracks. No research done by me (as usual). I struggle to see how a company as established as MYOB makes a $14 million dollar loss. I know they are retasking their products to become more cloud centric but they still have $240 million in revenue.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11210958
Ebitda was $120m. Not sure how many assets they have but being PE owned, it will have a lot of debt so probably not a true reflection.

[kizame]

From a TA perspective. The price has been consolidating for some time now,but the Bollinger Bands are now very tight,volume of shares are now getting lighter,and the stock is still being accumulated.
Get ready for an explosive move.

[Casino]

Couta, did you exit?

[Ascension]

Couta, did you exit?
lol

Hi everyone, I'm new to share trading. And this Xero thread is so funny sometimes.

[couta1]

Couta, did you exit?
Sold about 550 shares at $42.75 to cut exposure slightly,stayed home from work as wasn't going to sell out unless it went higher so watched closely,bought some HNZ shares to add bit of balance to portfolio,looks like it could have another run tomorrow,can't watch must work,cheers Moosie for pm

[Casino]

Thanks for sharing and hope you feel relieved seeing green arrows.

[SimonHouse]

Motley Fool Australia just picked Xero as their number one growth pick!

http://www.fool.com.au/pro-hub/1-asx-tech-pick-for-2014/?source=defaultsource

[Copper]

Motley Fool Australia just picked Xero as their number one growth pick!

http://www.fool.com.au/pro-hub/1-asx-tech-pick-for-2014/?source=defaultsource
Thank you for the reference.Read it through and if you were an investor you would definitely take a look at the Company.Motley has quite a following....

[Harvey Specter]

Thank you for the reference.Read it through and if you were an investor you would definitely take a look at the Company.Motley has quite a following....looks like it was released mid feb(?) so didn't result in any major rush into the stock.

[winner69]

looks like it was released mid feb(?) so didn't result in any major rush into the stock.

Must remember Aussies are a bit thick and slow on the uptake

[Toasty]

Woohoo. New high. $43.50.

[skid]

Sold about 550 shares at $42.75 to cut exposure slightly,stayed home from work as wasn't going to sell out unless it went higher so watched closely,bought some HNZ shares to add bit of balance to portfolio,looks like it could have another run tomorrow,can't watch must work,cheers Moosie for pm

Speaking about work--dont forget about me :)

[Shore]

Lots of buying action. Did that Motley Fool article only get publicly released yesterday (privately released to members mid-Feb maybe?)

[Toasty]

Lots of buying action. Did that Motley Fool article only get publicly released yesterday (privately released to members mid-Feb maybe?)

Food for thought. I can't find much other news other than an Android release of the mobile software.

[Shore]

Couta must be exhaling very sharply :)

[Toasty]

That's what I am thinking. The SP movements over the last couple days is very reminiscent of when the FNZC/CS broker report got released.

I wonder if its too late for Microsoft to buy it for $60? Facebook buy random stuff. Maybe they would be interested to actually buy something useful?

[zspoon]

Rather happy to have entered Xero at the recent dip to $37. Thoroughly offset by the decision not to enter Xero last year.

[Copper]

That's what I am thinking. The SP movements over the last couple days is very reminiscent of when the FNZC/CS broker report got released.
We may see if it's Motley influence when Aussy opens later.....

[Shore]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11215041&ref=rss&utm_medium=twitter&utm_source=twitterfeed

[clip]

well played couta :D and well done to all holders of course

[Bilbo]

From a TA perspective. The price has been consolidating for some time now,but the Bollinger Bands are now very tight,volume of shares are now getting lighter,and the stock is still being accumulated.
Get ready for an explosive move.


Time to buy XRO again boys and girls. if you're unsure watch for a high volume confirmation signal today or tomorrow. ;)

Wow, Moosie and Kizame, looking back at your posts from a few days ago I am in awe of your cystsal ball. I wonder if the news of the upcoming index inclusion was available to the affected fund managers a few days before the announcement and that is what was driving the change in the technicals that you picked up on?

[Bjauck]

Rather happy to have entered Xero at the recent dip to $37. Thoroughly offset by the decision not to enter Xero last year.
I think you would have been in good company. When it was under $10 last year, my parents asked their broker (from a major company) about Xero - they were told that, although it was good growth company, it was far too expensive!

[Bjauck]

Remember when Nadine Chalmers-Ross from TV 1's breakfast show let slip that John Key had said Xero was overvalued when it was $11??
Normally it takes a little prick to burst a balloon.

Which raises the question is the XRO price a balloon and what will provide the prick.

[zspoon]

...and there goes $45

[brucea]

Two years ago when they issued shares to existing shareholders at $2.75 I bought the maximum (I think) amount equivalent to $14,000 ie approx. 5000 shares. I was cautioned by an accountant friend as she said that Xero would never make it in the States and it was far too risky to buy more at $2.75

[Shore]

$14k > $225k - that's a decent upgrade. At what point do you begin to entertain thoughts of cashing out?

[Bjauck]

When Rod's dream $50B mCap comes true.

Welcome to the Apple of our generation (on a much shorter timeline!)
You must be talking about Apple generations! If I was in brucea shoes I would be seriously thinking of banking some of that (paper) capital gain. You ever know where a prick will come from. I must be old fashioned - at least you can smell feel and touch apple products. Anyway congrats to the soon-to-be(?) Xero millionaires.

[Shore]

I must be old fashioned - at least you can smell feel and touch apple products

I would argue that a huge portion of Apple's value lies within the massive ecosystem of content delivery it has built for itself - and that's stuff you certainly can't touch or feel.

[Copper]

...and there goes $45

That $45:99 looks like another non attentive broker putting buy order in ,no limit ,no reasonable sellers either.IMHO.

[Bjauck]

Point is, Rod picks targets and hits them consistently. Why not try for that dream then eh? You never know...
Fair enough....I am cautious, which is probably why the shares I bought 2 years ago are worth well south of what the same money invested in XRO would be worth!

[Bjauck]

I would argue that a huge portion of Apple's value lies within the massive ecosystem of content delivery it has built for itself - and that's stuff you certainly can't touch or feel.
True but how much would it be worth without those lovely smooth i-gadgets?

[brucea]

I recently sold 40% of my Xero shares and am quite happy to sit on the remainder to see what happens ... not quite a millionaire yet!

[Shore]

The only thing we need now to make this great little run complete is the customary 'please explain' from the NZX!

[JamesST]

You must be talking about Apple generations! If I was in brucea shoes I would be seriously thinking of banking some of that (paper) capital gain. You ever know where a prick will come from. I must be old fashioned - at least you can smell feel and touch apple products. Anyway congrats to the soon-to-be(?) Xero millionaires.
Anyone who fully participated in both the share purchase plans have converted $20k to over $500k
That excludes the shares you had to have to participate.
So there must be a large number of Xero half millionaires.
I think Rod is now officially a Xero Billionaire. A large number of NZ staff must be Xero millionaires. I wonder what the staff carpark looks like.

[gv1]

No wonder NZ economy looks soo good...talk about buying power with the zillions.

[Harvey Specter]

A large number of NZ staff must be Xero millionaires. I wonder what the staff carpark looks like.It will be interesting to see what the result of this is. In the US, they refer to the as the google mafia (and paypal mafia beofre them : http://techcrunch.com/2007/12/28/here-comes-the-google-mafia/) due to the money they have and the influence they have over the start up scene.

NZ closest example is probably Trademe, and all the new companys that have resulted from funding or founding by Sam Morgans or ex trade me staff (Lance Wiggs and Rowan Simpson come to mind but there are more).

[Harvey Specter]

Big international trade gone through at higher price. $45 should no barrier today.It closed in Australia at NZ$44.86. Matching is currently just below this.

[Bilbo]

I'm always surprised when people sell at market open when XRO is on a run. Past experience suggests that the big price jumps come after lunch when the Aus and Asian markets are open and if this run is based on the demand from inclusion in the Global Equity Asia index, then I would expect that trend to continue. Just my opinion and don't place any weight on it, but if I was selling today I would think carefully about timing. Would be interested in what others think.

On second thoughts maybe being a Friday might make the above observation less relevant. Don't really know so take with a grain of salt. I'm not selling so have not given it too much thought.

[nextbigthing]

I only loosely follow Xero.... has anybody done some analysis to see exactly how much market share has already been factored in now? I think I read at $30 the expected final market share in the states was already factored in!? If it makes it to $50 or $60 what is being factored in then? World domination?

[Harvey Specter]

I only loosely follow Xero.... has anybody done some analysis to see exactly how much market share has already been factored in now? I think I read at $30 the expected final market share in the states was already factored in!? If it makes it to $50 or $60 what is being factored in then? World domination?Depending how you classify the market (total small businesses or just SME that use accounting software). XRO initial target of 1m customers only requires 1% US market share from memory.

I second the Claridge Capital report for a bit more background.

[nextbigthing]

Depending how you classify the market (total small businesses or just SME that use accounting software). XRO initial target of 1m customers only requires 1% US market share from memory.

I second the Claridge Capital report for a bit more background.

Crikey only 1%! The reports I've heard are that it's an amazing product so 1% is nothing. Maybe the shareprice does still have along way to go. Best I get reading this Claridge report.

Disc; The above almost sounds like a ramp... I don't own but best I start researching...

[Harvey Specter]

Crikey only 1%! Best check I am correct on that. It is from one of the slide decks submitted to the NZX last year I think.

[Harvey Specter]

XRO being added to the ASX all ords index? Should be worth another $1?

[Harvey Specter]

The Motley Fool article got emailed out to subscribers of their free daily email service today - so that should drive more buying.I got mine yesterday. NOte: I am on the 'free' list so the 'pro' members may have got it earlier. Xero even tweeted a link to it this morning.

[steve fleming]

Xero listing in New York slated for next 12-18 months as it eyes US bolt-ons, CFO says

Xero [NZE:XRO; ASX:XRO], the online accounting system provider, considers the next 12 to 18 months as “the most likely timeframe” for a listing on the NASDAQ or the NYSE, CFO Ross Jenkins said.
Xero is also independently looking at acquisitions of small targets in the US that can help the company accelerate its research and development efforts to acquire features and functionality for its online products. Targets would be larger than the acquisitions made in the past two-and-a-half years, which were valued at less than USD 10m each, he said.
Xero’s main focus, however, is on organic global expansion with the priority its ongoing penetration of the US market, Jenkins said.
A listing on one of the New York exchanges would be mostly aimed at enhancing the company’s credibility on the local market as well as addressing a liquid market with an investor base that understands and recognizes the value of a technology-driven company, he said.
Xero has already brought high quality US shareholders onto its register through its October 2010 capital raise, includingFidelity, BlackRock [NYSE:BLK] and a number of East Coast funds, Jenkins said.
The company raised NZD 180m (USD 152m) from a share issue, according to a 14 October company announcement. US investors accounted for NZD 147m (USD 125m) of the overall raise.
In a March 2013 statement, Xero rejected speculation of an imminent US listing as premature.
The chatter picked up last February, however, after Xero appointed Chris Liddell, formerly ofGeneral Motors and Microsoft, as chairman, Bill Veghte as a US-based director, and Peter Karpas as CEO, North America.
Xero is focusing on becoming a global leader in the cloud accounting services for the small businesses space. While it is now concentrating on North America, the company plans to grow in the UK and Australian markets in 2015, through large investment in marketing and sales, Jenkins said.
As it stands, the UK, US, and Australian accounting software markets are dominated by three players.
Australian privately held MYOB is market leader in Australasia, with AUD 247m (USD 225m) in revenues.Sage [LON:SGE] is number one in Europe, with a GBP 4.64bn (USD 7.7bn) market cap, and the top dog in the US is US-basedIntuit [NASDAQ:INTU], with a USD 22.8bn market cap.
Xero has a NZD 5.2bn (USD 4.4bn) market cap. Its shares have risen 422% since the same period last year.
by Davide Schiappapietra in Sydney
mergermarket.com (http://www.mergermarket.com/common/ho.aspx?e=116&c=en-GB)

[gv1]

What do you think will be SP than moosie?

[Shore]

12-18 months makes sense to me. Now that Intuit is trying to up their game, timing is crucial. A listing in the US provides priceless credibility and profile and is integral to Xero achieving it's goals over there, so IMHO they can't afford to delay. As soon as they met whatever requirements they need to, I think they need to push the button.

Yes moosie_900 , would love your opinion on what you think the SP would do leading up to, and during, a listing in on the NASDAQ or NYSE.

[couta1]

Intuit currently trading at around $80 US so I guess you could think about how far would XROs value be behind Intuits at time of listing maybe?

[Santiago]

Intuit currently trading at around $80 US so I guess you could think about how far would XROs value be behind Intuits at time of listing maybe?

I think Intuit's market cap is the more interesting comparison, currently at around US$23b. XRO is still small fry compared to that.

[gv1]

I think we all gave up on trying to guess Xero's sp a long time ago gv! I'd guess the best bet would to be in for the initial day(s) spike from piqued interest and illiquidity (will still be tightly held I presume.
Thanks moosie, thought you are from northern hemisphere, you might know how they work there!

[JamesST]

Intuit currently trading at around $80 US so I guess you could think about how far would XROs value be behind Intuits at time of listing maybe?
One thing is for sure. Xero have done a great job positioning themselves as Intuit's number one nemesis. There is a lot in the media and on twitter comparing the two companies and Xero's chances in taking on Intuit. This is great marketing. Intuit employees are taking the bait and referencing Xero a lot on twitter. This gives Xero airtime with their customers and positions them as a credible threat.
Rod has led the charge here. His constant public baiting of MYOB worked wonders.

[Shore]

Yep that's been a very successful strategy to knock out rest of the smaller players in one fell swoop by talking up the game with Intuit... suddenly everyone else was removed from the picture.

[couta1]

Sold down some more today to balance my portfolio,bought some Air nz and Whs at days lows,plan on keeping about 1.5-2k shares as long term hold now to see the story to its end,will be around 5% of my portfolio which I think is a heavy enough weighting

[Shore]

Pleased that the story came right for you Couta!

[Harvey Specter]

Good review from Computerworld. Didn't actually read it but it looks like Xero just pipped the competition:
http://www.pcworld.com/article/2104703/top-choice-our-favorite-online-based-business-accounting-apps.html

[Airw0lf]

Good review from Computerworld. Didn't actually read it but it looks like Xero just pipped the competition:
http://www.pcworld.com/article/2104703/top-choice-our-favorite-online-based-business-accounting-apps.html

Interesting, was expecting Xero to be a fair bit ahead of Intuit to be honest. Instead it looks like Xero won out by a nose!

[JamesST]

I guess the below is flattering at least. Looks like the classic Zeppelin raid. Bomb Xero homeland to divert resources from the front line.

"On Friday Intuit raised eyebrows at the Institute of Certified Bookkeepers’ Sydney conference by promoting its top-of-the-range cloud accounting program for just $5 per month (http://boxfreeit.com.au/2014/03/07/intuit-slashes-price-quickbooks-online-5month/).
QuickBooks Plus (http://www.intuit.com.au/) usually costs $35 per month which already undercuts its main rival Xero by at least $15. But the new marketing campaign signals a new stage of the cloud accounting war – Intuit is trying to hobble Xero before it can establish itself in Intuit’s home market, the US."
http://boxfreeit.com.au/2014/03/10/prelude-price-war-intuits-5month-cloud-accounting-campaign/

[Malpaso]

Howdy, was at an accountants conference two days ago and Rod was one of the presenters. He's certainly upbeat and kept mentioning "millions" of customers numerous times which was an encouraging sign. A couple of things he mentioned was that Xero were switching on the Australian tax functionality (i think referring to a direct link through to the ATO) which (in his words) meant "killing" MYOB there, and that MYOB was "s&$%" which went down well with the crowd. Regards Intuit he spoke about the multi day outages they had been experiencing in America, and that Xeros senior people were much better than theirs. Mentioned that they were the leader in the UK, now ahead of Sage. Certainly an entertaining and switched on guy, ready to conquer the world. Good stuff.

[Leftfield]

... was at an accountants conference two days ago and Rod was one of the presenters

Nice to have this update... thanks.... Love the talk of millions of customers!! Still a way to go tho.

[JamesST]

Howdy, was at an accountants conference two days ago and Rod was one of the presenters. He's certainly upbeat and kept mentioning "millions" of customers numerous times which was an encouraging sign. A couple of things he mentioned was that Xero were switching on the Australian tax functionality (i think referring to a direct link through to the ATO) which (in his words) meant "killing" MYOB there, and that MYOB was "s&$%" which went down well with the crowd. Regards Intuit he spoke about the multi day outages they had been experiencing in America, and that Xeros senior people were much better than theirs. Mentioned that they were the leader in the UK, now ahead of Sage. Certainly an entertaining and switched on guy, ready to conquer the world. Good stuff.
Have to say that his confidence certainly rubs off.
Competitors offering $5/month subscriptions smacks of desperation. At a time that Xero has increased prices and still outpacing the pack on customer growth %. Accountants and business owners aren't stupid and I doubt they will choose a supplier offering an unsustainable product for the sake of $30 odd per month.
Intuit already get twitter criticism for wait times on support. How can you justify giving ANY support for $5?

[couta1]

Man watching Xro this morning is giving me eye strain its all over the place,quite exciting better than a video game.

[Malpaso]

The usual round of Friday profit taking, it'll be back up next week. The Intuit price drop may be having a minor impact, hard to say. I see Wynyard is doing some capital raising; we all know what happenned when Xero did this back in 2012 .... will be jumping on their share issue as well with hopefully similar results down the line, though to no where near the same degree as Xero.

[apac]

Everyone still holding on tight? Can't wait for it to bounce back up and exceed $50, then $60 etc.... and when they announce listing in US, that's when the real fun begins.

[Dentie]

Some pretty awesome appointments from XRO announced today!
https://www.directbroking.co.nz/DirectTrade/dynamic/announcement.aspx?id=3547323

I know this occurred a month ago, but I have been doing some research on Sam Knowles and noticed that he quit Xero (with immediate effect on 12/2) as well as cashing up his shares in the company forthwith. I might be wrong, but there doesn't appear to be any corresponding comment on this thread about what might be behind this resignation.

Any ideas anyone?

Cheers

[Harvey Specter]

I know this occurred a month ago, but I have been doing some research on Sam Knowles and noticed that he quit Xero (with immediate effect on 12/2) as well as cashing up his shares in the company forthwith. I might be wrong, but there doesn't appear to be any corresponding comment on this thread about what might be behind this resignation.

Any ideas anyone?

CheersXRO wanted someone with US experience/focus and given he resigned the day Chris Liddell was appointed, it was obviously a planned move which Sam would have been involved with. No scandal if that is what you are trying to find out.

Sam is a busy guy so it is expected he would move on quickly once no longer required as Chairman.

[Valuegrowth]

It is time to study this new development.

My ideas are not arecommendation to either buy or sell any security, commodity or currency.Please do your own research prior to making any investment decisions

[Valuegrowth]

Huh? What new development?

One is Xero's transition to a globalbusiness and to become global leader.

Second one is strategy is to increase US representation.

Very interesting.

My ideas are not a recommendation toeither buy or sell any security, commodity or currency. Please do your ownresearch prior to making investment decisions.

[Dentie]

2 quick Qs though. Are you sure he sold all his shares in XRO? Also, just interested, how come you are doing research on Sam Knowles?

No, am unsure whether he sold ALL his shares - still, selling 200k+ shares at those SP levels is not insignificant.

Don't worry ...innocent initial research... I was looking for someone with his talents.

[Dentie]

XRO wanted someone with US experience/focus and given he resigned the day Chris Liddell was appointed, it was obviously a planned move which Sam would have been involved with. No scandal if that is what you are trying to find out.

Sam is a busy guy so it is expected he would move on quickly once no longer required as Chairman.

Thanks Harvey. I get why they employed new people for the US market ...just couldn't quite understand why they would also flick someone with Sam's talents. Just because you take on more senior management doesn't automatically follow that you would want to ditch the existing talent - especially if the new talent was going to be operating in a whole new country miles and miles away from home.

My inquisitive mind never stops ... is all!

[Harvey Specter]

Thanks Harvey. I get why they employed new people for the US market ...just couldn't quite understand why they would also flick someone with Sam's talents. Just because you take on more senior management doesn't automatically follow that you would want to ditch the existing talentthe role is chairman, not an executive role so you can't have two.

And I think the Labour Party is the only organisation with two previous top bosses willing to hang around in more junior roles. Any high flyer will accept the reason (was probably involved in the decision) and move on to equally important things.

[couta1]

Now it's all risk-on; buy buy buy! this market makes my head dizzy sometimes...
Another run you reckon Moosie leading up to the index inclusion this Friday I think officially

[Hawkeye]

I went away for a few days. When I left it was dropping a dollar or so a day, now its rocketing up, what have a missed?

[couta1]

I went away for a few days. When I left it was dropping a dollar or so a day, now its rocketing up, what have a missed?
Welcome to volatility mixed with a bit of the Ukraine

[Shore]

So can someone explain the practical benefits of being included in the ALL ORD's - aside from the increased exposure and market profile, is it the same situation that Aussie funds that track the All Ord's will have to buy into the stock?

[Harvey Specter]

So can someone explain the practical benefits of being included in the ALL ORD's - aside from the increased exposure and market profile, is it the same situation that Aussie funds that track the All Ord's will have to buy into the stock?Bingo
.

[Shore]

So, theoretically this might prove to have more impact on the SP than Xero's inclusion into the NZX50 did?

[Casino]

Not sure if this video was posted before but I found it informative:

http://www.youtube.com/watch?v=y4sF2ayPmJY#t=12

[Shore]

Apparently Milford have just pegged Xero's value at $60

[Lorne Ranger]

Apparently Milford have just pegged Xero's value at $60

Tempting to whoop at this, but then Milford are not the most impartial valuer given how much stock they own?

[nextbigthing]

Apparently Milford have just pegged Xero's value at $60

They picked DIL pretty well. Will be interesting to see if they start off-loading at that price.

[luigi]

My question is, can this statement be reconciled with reality now? I just can't see it. If so, how? I would love to know. Or is this simply stubborn and arguably even ignorant opinion? I can for sure see how people might have thought XRO was a bubble at $5 nearly two years ago, how that theory can be still held now and reconciled with todays reality is what I struggle with. Would love to hear some thoughts on that.


Bubbles are only obvious in hindsight if they pop. What you could say is that when it was at $5, XRO's price appeared to considerably exceed its value (risk adjusted expectations). Since then XRO's value has caught up with and now exceeds $5. i.e. US prospects have improved and additional capital raising has derisked the stock.

That's not to say that we aren't currently seeing a bubble - The 40% price rise from $30 to ~$43 in January occurred with no material announcements by the company.

[skid]

Above is a clippet from a post from Snoopy on the RYM thread. Since posting there has been at least 1 person to 100% agree. My question is, can this statement be reconciled with reality now? I just can't see it. If so, how? I would love to know. Or is this simply stubborn and arguably even ignorant opinion? I can for sure see how people might have thought XRO was a bubble at $5 nearly two years ago, how that theory can be still held now and reconciled with todays reality is what I struggle with. Would love to hear some thoughts on that.

The last statement almost seems self defeating to me. If "Bubbles are always obvious with hindsight" then surely 2 years after the SP hit $5 and the SP is now $45 it is about time to admit you at least, might have been wrong?? How long does the SPO need to hold above $5 before the one admits they were completely wrong?

One detail to support where I'm coming from here; the C.S/FNZC report on XRO using the "US fail" scenario has a DCF valuation of $13.50 a Rev multiple value of $10.11 and a $12.14 composite valuation. Of course the details of these valuations could be argued but one point I would make would be to say that even if the "bubble" popped now, a SP of $10 or so is probably realistic. For $5 to be a bubble would we not be looking at a SP of well below $5, maybe even as low as $1 or so? No doubt someone could throw together a valuation model that supports that but I suspect if would have to make some pretty dubious assumptions.

Anyway, the debate is not particularly important IMHO, just thought it might instigate some interesting discussion :)

I kind of get the feeling that with a share like xero it will be one extreme or the other.
It could be the next big thing in the US, but Im to much of a coward to find out, at this level.(It depends on alot of outside forces)

[skid]

Bubbles are only obvious in hindsight if they pop. What you could say is that when it was at $5, XRO's price appeared to considerably exceed its value (risk adjusted expectations). Since then XRO's value has caught up with and now exceeds $5. i.e. US prospects have improved and additional capital raising has derisked the stock.

That's not to say that we aren't currently seeing a bubble - The 40% price rise from $30 to ~$43 in January occurred with no material announcements by the company.

Yep-Two of the biggest movers on the NZX are both waiting on actual sales figures from the US---interesting times

[Harvey Specter]

Two of the biggest movers on the NZX are both waiting on actual sales figures from the USYet china is now our biggest export partner after Australia.

[Snow Leopard]

...but I love the chart:
5611
20 months closing prices and 16% trailer.

So apart from a little concern early last Dec, no worries yes?

Best Wishes
Paper Tiger

[Dentie]

...but I love the chart:
5611
20 months closing prices and 16% trailer.

So apart from a little concern early last Dec, no worries yes?

Best Wishes
Paper Tiger


ha ha ha .... this chart says it all. Even Mr Elliot and his wave would be scratching his head .....

[Shore]

is that a typo??
$113,363,383 turnover?

[Shore]

$113m through the till today?

[Novitiate]

Xero joins the All Ords on Monday.

[Hawkeye]

http://www.stuff.co.nz/dominion-post/news/9856455/Did-you-hear-about-the-Morgans

Nice bit of PR carried by the Dompost and Press

[Casino]

http://www.stuff.co.nz/dominion-post/news/9856455/Did-you-hear-about-the-Morgans

Nice bit of PR carried by the Dompost and Press

Two remarkable characters, which illustrates that Xero's success has concentrated a lot of wealth in worthy hands. Some of it has gone to philanthropy, some of it will probably fuel the next innovation.

[Harvey Specter]

Given Vends close intergration with Xero, Vends capital raising today should be seen as a positive sign. The more shops that sign up with Vend, the more companys will probalby use Xero as well.

[luigi]

http://philosophicaleconomics.wordpress.com/2014/03/22/wmt/

Some food for thought regarding retrospective valuation multiples.

"As an investment theme, “growth” is infinitely more powerful than “value”, if you get it right (a big “if”–obviously). And so when we come upon fantastic companies with very large growth potentials, and we let our anchoring biases write them off–”that’s too high, I refuse to pay that much”–we sometimes do ourselves a disservice. A price of 40, or 75, or 100 times earnings can be a very reasonable price, for the right business. It might even be a screaming bargain, as it was in the case of $WMT."

[couta1]

Free falling wish I had some more spare cash,could only buy a few by canceling my trs order

[couta1]

Give it another day or two couta. Looking for 40.00 to hold. Decline is on very small volume so watch for a reversal on high volume with a hammer day ;)
At least it snapped me out of Mega mode,probably a good thing,are you looking at buying in at these levels Moosie? Cheers

[SirPrize]

Any ideas why the fall? Seems like it's been fighting between 40-44 for quite some time now.

[Snoopy]

Some food for thought regarding retrospective valuation multiples.

"As an investment theme, “growth” is infinitely more powerful than “value”, if you get it right (a big “if”–obviously). And so when we come upon fantastic companies with very large growth potentials, and we let our anchoring biases write them off–”that’s too high, I refuse to pay that much”–we sometimes do ourselves a disservice. A price of 40, or 75, or 100 times earnings can be a very reasonable price, for the right business. It might even be a screaming bargain, as it was in the case of $WMT."

Net loss for six months to September 30th $17.1m. Annualise that to -$34.2m. Some 124m of shares now on issue. Based on a PE of 100 company could be worth up to 100 x earnings which is -$3,420m. Divide that by the number of shares on issue and I get minus $27.50 per share

Talk about a perma bear prediction! Take a bear that size off the planet and most of the Arctic would disappear! You really think it has got so bad that shareholders will need to pay over $27 a share to get someone to take their XRO shares off their hands?

SNOOPY

[couta1]

A fall below $40.00 would pique my interest. Watching the charts and world economy for buying ops ;)
Its happening Moosie,$39 now,seems extreme:cool:

[SirPrize]

Time to spear head into this beast?

[LegendOfRiot]

Finally picked some up. Been waiting for some weakness.

[sommelier]

What makes you think it`s slowing? SirPrize, Tumeric, LOR

[sommelier]

Just sayin`. Yesterday, 5pc drop, bounced at 1pm, volume increased and was stabilised at 5pc drop. Today...

[couta1]

You guys that are thinking of buying are freaking mad (IMHO) :)
I guess those of us thought bought in even higher must be clinically insane then?:cool:

[couta1]

Has stabilized,back to $44 within a week or so,if it reaches its potential these current prices will be chicken feed:cool:

[Lost in space]

Obviously it was a great buy at $1.50. My post directly referred to people looking at buying now, not in 2008!

"Obviously"? Really? I wonder if you make that comment with the benefit of hindsight. I remember a number of people saying exactly saying @ $1.50 what you are saying now.

Turmeric is correct in my view. History has and will in the future determine whether price points in this stock represented good investments or not. To date the floor is littered with those wrong.

[pierre]

Standing here today, however, I still think its is ridiculously overpriced unless they truly do dominate global cloud accounting software.

Another step on the path to global dominance of cloud accounting software:

GENERAL: XRO: KPMG & Xero form strategic alliance for UK SMBs

KPMG & Xero form strategic alliance for UK SMBs

31 March 2014

Accounting software company Xero Limited (XRO) has announced a strategic
alliance with KPMG in the United Kingdom.

The alliance sees Xero's online accounting platform playing a central role in
the formation of a new KPMG division, which will provide select online
accounting and tax services to small and medium sized enterprises using the
cloud. Interested businesses will be able to sign up to the services from May
2014.

"It is very gratifying that an organisation of KPMG's standing selected Xero
to be its technology platform partner for their online services, confirming
our belief that cloud accounting is fast becoming the default platform for
both accounting firms and small businesses," said Xero UK managing director,
Gary Turner.

This latest alliance is part of a programme of strategic partnerships by KPMG
aimed at supporting the SME sector.

"Today's partnership further demonstrates our commitment to small and early
stage businesses that form the backbone of the UK economy and its future
growth," commented Simon Collins, UK Chairman of KPMG. "Xero is an impressive
software platform, supporting delivery of our services to this segment where
technology is increasingly transforming the way we do business."

[Harvey Specter]

Another step on the path to global dominance of cloud accounting software:

GENERAL: XRO: KPMG & Xero form strategic alliance for UK SMBs Interesting as they have partnered with Deloitte for NZ and Australia.

KPMG are 4th biggest firm in the world but 3rd in UK (http://www.accountancyage.com/static/top50-this-year). Deloitte are biggest in the world but second in UK.

[SirPrize]

Very positive news.

[whatsup]

Very positive news.

Should trade very well today .

[robbo24]

Nice bounce off oversold levels on the cards. Anyone buying under $40 should do well :)

Hammer Time, you reckon MC Moosie?

[winner69]

The trouble with XRO, IMHO, is that it has been hit very hard by the big sell off in many NASDAQ listed companies over roughly the last two weeks. For example check out the likes of FB (down 15%), Pandora (-20%), NetFlix (-20%), Amazon (-8%), LinkedIn (-8%). It's also interesting to compare XRO with arguably more similar companies such as N, CRM, and WDAY who are all down from between 12 to 21%.

So seems to me that to a certain extent the XRO SP has been following a similar trend all be it holding up better than most; XRO is down about 10% over the same time period.

People looking for entry prices with XRO might therefore be best to have a think about where they anticipate the NASDAQ is heading this week and over the short term.

Maybe right turmeric

But my mate Conor said what you said in more succinct terms when he tweeted

As someone who has lived through a tech bubble and the Irish property bubble the stench of snake oil from Silicon Valley is overwhelming

Must have some affect on XRO

[SirPrize]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11229529

[Santiago]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11229529

Hooking up with KPMG in the UK could potentially be huge for Xero's expansion there. It'll be interesting to see the details of the deal, when they're available.

[lastmoa]

Agree this KPMG deal for UK is a big deal and the Xero's SP may reflect this when it digests and the global tech-readjustment finishes. (Well stablise in the $40's, for now, anyway).
UK is a potentially larger SMB market than Aust/NZ combined so for such a large global corporation to endorse Xero and form a 'strategic alliance' is awesome PR for Xero.
KPMG is very conservative at the best of times. Impressive endorsement whatever way you look at it.
If you are an investor and not a trader then remember to follow the story and try to somewhat ignore the wild gyrations in the SP. This is just another completed piece in the puzzle.

[robbo24]

Agree this KPMG deal for UK is a big deal and the Xero's SP may reflect this when it digests and the global tech-readjustment finishes. (Well stablise in the $40's, for now, anyway).

That's right dellow, afterall [emphasis added]:


At the start of 2013:


There were an estimated 4.9 million businesses in the UK which employed 24.3 million people, and had a combined turnover of £3,300 billion
SMEs accounted for 99.9 per cent of of all private sector businesses in the UK, 59.3 per cent of private sector employment and 48.1 per cent of private sector turnover
SMEs employed 14.4 million people and had a combined turnover of £1,600 billion



http://www.fsb.org.uk/stats (http://www.fsb.org.uk/stats)

[winner69]

Haha, I know you are prodding for a reaction winner, so I may as well give you one. Of course Conor may be right, but just to be clear, he is making a very different point to me. My personal opinion is this is simply a minor correction in some tech stocks. I suspect we will be back to previous levels soon. Conor on the other hand appears to be implying something way more significant and long lasting :)

Either way people gotta make up their own minds where they believe the NASDAQ is going I guess...

Yes you are probably right and Conor was just having a hissy fit

Seems like Yellen has had her wings clipped and money will remain cheap for a lot longer, at least to the next electiosn ....so Nasdaq at 5000 in a month or two and XRO at $50 plus a near certainty

[couta1]

More good news Xro and Square form alliance

[Harvey Specter]

More good news Xro and Square form allianceyip. And Dorsey retweeted to his 2.5m followers, plus all the press as the tech blogs love Square.

This is great validation.

[robbo24]

yip. And Dorsey retweeted to his 2.5m followers, plus all the press as the tech blogs love Square.

This is great validation.

Square has a similar alliance with Intuit, I wonder if there's any data to show what effect that had for Intuit.

[Harvey Specter]

Yup that is a pretty deal for both Square and Xero I would say.


Youch, was looking good for $40 for a while but now not looking comfortable at all.They made the same announcement with Innuit today so not as significant as many (ie. Me) would have thought.

[robbo24]

They made the same announcement with Innuit today so not as significant as many (ie. Me) would have thought.

Remember the 3 day announcement-to-reaction we sometimes see with XRO.

Even a cynic like Balance has noted this...

[couta1]

Topped back up today at $38.50. Hoping we see another bounce to $40 off the back of the rebounding NASDAQ and possibly a delayed reaction to XROs recent announcements. Not liking the overall direction of many NZX growth stocks though. Whats the consensus on that one again?? I thought they were simply following the NASDAQ but seems they have not rebounded as one would expect based on that logic. Thoughts appreciated. Teddy bears picnic has come a month early this year:cool: Dont think that latest annoucement is going to move much

[Airw0lf]

Wonder if these new competitor initiatives have something to do with it? http://www.businessspectator.com.au/news/2014/4/2/technology/knives-out-xero-myob-tussle

[couta1]

Wonder if these new competitor initiatives have something to do with it? http://www.businessspectator.com.au/news/2014/4/2/technology/knives-out-xero-myob-tussle
I don't think so looks like a good dose of profit taking coupled with a general weakness of NZX tech stocks to me,from my limited knowledge it appears myob are still well behind XRO as a total package.