Xro - xero

[dingoNZ]

Thanks for these insights Roger - I'm always keen to learn new methods etc. One question though... why the 100 day MA and not the 200 or even 60 day MA? How do you work out what MA is appropriate?

thanks in advance.

Also curious re this. I've never been one to use TA but it would make sense for me to determine good entry points for my FA

[winner69]

Panic selling on low volume, nothing to see here let's move right along:cool:

Still the 6th most traded stock on the NZX today

[biker]

Volatility is the name of the game here tzbang expect plenty of it, I'm only focused on where the share price will be at in 3-5 years time the rest is just short term noise that needs to be tuned out unless your trading the stock.

I really think that regarding a 50% drop in share price as simply 'market noise' is a very big ask, regardless of time frame. I've been there, in other stocks and would sees this as a major shift in market sentiment, short and long term.

[Beagle]

Thanks for these insights Roger - I'm always keen to learn new methods etc. One question though... why the 100 day MA and not the 200 or even 60 day MA? How do you work out what MA is appropriate?

thanks in advance.

You're most welcome. We're really getting into personal opinion here, no hard and fast rules but seeing as you asked, (Google this question and canvass a range of opinions might be a good idea).
100 days being just over 3 months is something I consider to be long enough too have an excellent chance that a signal is the start of a genuine new SP trend emerging. If you use say a 30 day MA you can get whipped around between buy and sell signals too often and often signals are false and the trend that triggered the signal turns out to be temporary or false. 200 days is too long in my view in that a lot of your profit or loss from a new SP trend is lost while you wait for such a lagging indicator. 60 days would probably be a reasonable one to use and more often that not an indication off that is reliable. All depends on how much of the initial SP trend you're prepared to forsake for the extra reliability of a longer MA indication. ANZ securities has 30 day and 100 day MA on their graphs so that's another reason I simply use 100 day MA, keeping it simple and easy.

15% stop loss is my favourite...doesn't matter how much your conviction about any given stock, it's a good thing to go into any investment recognising that you might simply be wrong. Why 15% ?, again, its loose enough to remove a lot of the day to day volatility and avoids to many exit signals, and on the other hand tight enough to avoid major investment disasters. That's my 2 cents, hope it helps.

[couta1]

I really think that regarding a 50% drop in share price as simply 'market noise' is a very big ask, regardless of time frame. I've been there, in other stocks and would sees this as a major shift in market sentiment, short and long term.
You could say the same for all the other tech stocks doesn't mean it will stay that way, patience is your greatest asset.

[artemis]

To be honest, I'm pleased. At the time he seemed like a weak hire. To lead the USA, they need a bulldog. Somebody who has clout and can go in swinging and take it to Intuit (a Rod really). They need a big name. Peter seemed like too much of a nice guy, and with his past connections to Intuit, maybe he didn't have the stomach to get his hands dirty?

Don't know the background to this, but I have worked for two large global corporates. They take no prisoners if a hire is not working out.

The 100 day rule is often used - got to show your mettle within that time frame.

[Dentie]

You're most welcome. We're really getting into personal opinion here, no hard and fast rules but seeing as you asked, (Google this question and canvass a range of opinions might be a good idea).
100 days being just over 3 months is something I consider to be long enough too have an excellent chance that a signal is the start of a genuine new SP trend emerging. If you use say a 30 day MA you can get whipped around between buy and sell signals too often and often signals are false and the trend that triggered the signal turns out to be temporary or false. 200 days is too long in my view in that a lot of your profit or loss from a new SP trend is lost while you wait for such a lagging indicator. 60 days would probably be a reasonable one to use and more often that not an indication off that is reliable. All depends on how much of the initial SP trend you're prepared to forsake for the extra reliability of a longer MA indication. ANZ securities has 30 day and 100 day MA on their graphs so that's another reason I simply use 100 day MA, keeping it simple and easy.

15% stop loss is my favourite...doesn't matter how much your conviction about any given stock, it's a good thing to go into any investment recognising that you might simply be wrong. Why 15% ?, again, its loose enough to remove a lot of the day to day volatility and avoids to many exit signals, and on the other hand tight enough to avoid major investment disasters. That's my 2 cents, hope it helps.

All taken onboard Roger - much appreciated!!

[Shore]

From the rhetoric that's been creeping in over last few months, it's pretty clear that they've conceded the USA is going to be very slow, multi-year effort, and at this stage I think the only thing that's going to jump start their invasion is a listing. It would give them credibility and publicity that their money just can't buy. Without it, there's virtually no chance I don't think they could get the traction they need.

[couta1]

Its almost fun watching all the panic on a day off, hopefully a lot are selling for some profit but I doubt it somehow given the herd mentality in operation:cool:

[tzbang]

What market analysis does everyone else? I've just been using Google Finance, I'm sure there are better options?

[mayday]

Kim.com might be right this stock had been well overvalued

[baller18]

Don't swim against the trend! The trend is your friend!!! Like roger says, get in when the uptrend forms!

[Santiago]

The US strategy is not working. Not a surprise. At least they're doing something about it, but I think we're in for a few years at least before they make any penetration there. They need to start with a finished product- it's a more demanding market.

On the positive side, Australia seems to be rocking and so is the UK by all accounts. Trade the pops, or go long (5 years) or stay out and watch until the worm turns. All seem like reasonably sensible strategies to me depending on one's objectives. Worth bearing in mind that past experience has shown that when this share moves, either up or down, it moves far and fast.

Whatever the share price, 80% annual growth is a phenomenal thing to maintain year after year. My biggest concern, though, is that they misread the US. It's the first significant misstep. I hope they learn from the experience and come back stronger.

[Hawkeye]

The US strategy is not working. Not a surprise. At least they're doing something about it, but I think we're in for a few years at least before they make any penetration there. They need to start with a finished product- it's a more demanding market.

On the positive side, Australia seems to be rocking and so is the UK by all accounts. Trade the pops, or go long (5 years) or stay out and watch until the worm turns. All seem like reasonably sensible strategies to me depending on one's objectives. Worth bearing in mind that past experience has shown that when this share moves, either up or down, it moves far and fast.

Whatever the share price, 80% annual growth is a phenomenal thing to maintain year after year. My biggest concern, though, is that they misread the US. It's the first significant misstep. I hope they learn from the experience and come back stronger.


I agree to everything above

[Toasty]

http://www.stuff.co.nz/business/industries/10491385/Shares-fall-as-top-US-exec-quits-Xero

I thought this was an ok response to the whole CEO stepping down issue. Still a big change for investors to absorb but makes sense.

[mp52]

For those wondering "what would the moose do" (WWTMD?) in this kind of situation wasn't it a notice that the next support test is $18 and this could be decided by Thiel around October? Wonder to what extent he was involved in selecting the hirenow out? Thiel that is... not Moosie.

[Dentie]

For companies that are supported by fundamentals (ie. earnings, dividends, return on equity etc) I use a 200 day MA to signal an exit. However, for risky, unprofitable, cash burning companies I use the 120 day MA as the exit signal. This is because companies supported by long term fundamentals can usually be relied on to be long term investments, thus you can use a long term indicator. Companies that are trading on "hope and faith" will drop significantly at the first sign of trouble, and if they are not profitable and burning cash they may end up disappearing altogether (or issuing so much more capital that your original investment is diluted to practically nothing) so you need a short term indicator in order to bail on it quickly.

Any company can spin a "story" - delivering on the promises made on time and on budget, is another story altogether! Dont believe in the spin, believe in the actual numbers.

Good comments KW - thanks for taking the time!!

[Beagle]

Kim.com might be right this stock had been well overvalued

Welcome to the forum and a good first post.

[Copper]

Has anyone any idea where he turnover came from today.There was the same high turnover when it hit around $21 last time it was down here. On that occasion it rose quite a bit next day.Someone may have a broker contact.Have we got rebalancing??

[dingoNZ]

No but it was from the selling driving it down, some HUGE crossings through the market, 100k, 140k and 200k to name a few. I think the news today was the limit for some large holders and funds.

[tosspot]

tzbang I've learnt there is no point in seeking others opinions on this stock if those opinions are going to determine whether you believe in the stock or not, if you don't believe the story then stay out, as you know Xro has a mind of its own and will continue to be volatile for ever and a day. Regarding the Moose, I bought Xro at $42.50 on a strong buy directive from him so he didn't always get it right but he was very good on the stock most of the time but I guess what I'm trying to say is DYOR and then be happy with whatever decision you make.

Oh wow, surely your at a point where you can say ok ive lost enough and move on. My opinion is that we will never see $42 again, unless xero can fundamentally match that with profit of 100 million+ atleast which is years away. this must be hurting each day watching it go down.

at what point are you going to say thats enough. $15 maybe $10. if it does go down to that are you still going to be saying the same thing.

just remember you can always buy back in if it does start going up again.

not an attack, just trying to help out.

[couta1]

Oh wow, surely your at a point where you can say ok ive lost enough and move on. My opinion is that we will never see $42 again, unless xero can fundamentally match that with profit of 100 million+ atleast which is years away. this must be hurting each day watching it go down.

at what point are you going to say thats enough. $15 maybe $10. if it does go down to that are you still going to be saying the same thing.

just remember you can always buy back in if it does start going up again.

not an attack, just trying to help out.
Hi tosspot obviously I believe Xro can and will see $42 and more in due course, if the price dropped back to $10 I'd be out because the company goals would be toast at that point and the company would have failed in its stated objectives,cheers

[Onion]

the company goals would be toast

What is the link between the SP and the company's goals? What would prevent them getting to $100m/y at a SP of $10 (that doesn't exist @ $23)? The only link I can see is if they need to raise more funds - a higher SP would be advantageous. But they have said that they have enough on the bank.

[Fisherboy3]

Xero has always been able to admit its mistakes early eg acclipse, xero personal. reading the article he wasn't comfortable in the job. Theres still no other credible 2nd place saas accountancy software provider in the US (see fox finance article) sage is about where myob is. fresh books (much smaller financial resources than xero) doing well in uk. iNtuit with a xero (copied) like user interface but clunky transactional processing not allota love for qbo (forums)' Ird and many banks still operate on ms-dos why is that relevant because it shows how hard it is to change your root programming language for your software look at nova. building robust software in this space takes years. Payroll and inventory need to be sorted in xero 500 programmers working on this but not easy to crack in a intuitive simple and reliable way. Banking 2.0 (pay straight from xero)and interim results are the next relevant news for xero SP. don't overlook UK 64million people vs Aussie 24 million so big UK market. Sage 8 billion market cap if xero gets 25% that's $2 billion. All accounting software companies admit cloud is the way of the future. Definitely going to get 10% of the US market. 25% UK and 50% of aus/nz for SME. if xero was worth $5 in 2012 it's worth $20 now IMHO. Interim results should push SP up same as what happened Sept 2012 after sept 2012 6 monthly results.

[oldmate]

tzbang I've learnt there is no point in seeking others opinions on this stock if those opinions are going to determine whether you believe in the stock or not, if you don't believe the story then stay out, as you know Xro has a mind of its own and will continue to be volatile for ever and a day. Regarding the Moose, I bought Xro at $42.50 on a strong buy directive from him so he didn't always get it right but he was very good on the stock most of the time but I guess what I'm trying to say is DYOR and then be happy with whatever decision you make.

Couta with respect you bought because you thought the shares would be more than now and they have halved (it was no ones decision but your own and to be fair there were plenty more people mocking people buying in at a high price and few directives were listened to).

Shares are like a piece of fruit it is only when you peel back the skin can you do a health check and unless you are sitting in the boardroom you are relying on google which can be hit and miss. Yes I hear you are a long term trader (this would console you when you see the share price) but I guess you are checking the price daily I guess multiple time because you got it wrong and each post you have written demonstrates this. Eg exciting to watch panic selling. Life is game of chess you have to right moves.

[Fisherboy3]

All I can see is xero continuing to track right and if this continues for two years and has another three years runway ahead then logically it should quadruple again as it did from 2010-2012 and again 2012-2014. Then it's an $80 share. That 2012 figure of $5 a share was the lowest revenue vs cap that xero has been and it's not far off that now. I know past performance is no indicator but this is a strongly growing company who has met all it's targets, admits it's mistakes, always pulls rabbits out of hats and is honest ie xero knows the US will take time they are just setting up there attack and what chess pieces they should use.

[mikeybycrikey]

All I can see is xero continuing to track right and if this continues for two years and has another three years runway ahead then logically it should quadruple again as it did from 2010-2012 and again 2012-2014. Then it's an $80 share.

Rod Drury, is that you?

I think unless Xero can gain any sort of traction in the US, an SP of $80 isn't going to happen. Not in the next couple of years anyway. The share price as it stands is pricing in a lot of future growth. The company has a good track record of delivering 80% growth per year but that will tail off.

And the share price growth for a growing company is going to tail off before the sales growth. Share price is a leading indicator indicator of sentiment.

I'd say $80 in 4 years maybe, if everything goes well. Two years is dreaming, especially if US sales carry on as poorly as they have.

[blackcap]

I'd say $80 in 4 years maybe, if everything goes well. Two years is dreaming, especially if US sales carry on as poorly as they have.

So you are saying that investors now at $22 will make a return of 363% in the next 4 years? Come on that's pie in the sky stuff. The current price of $22 has all the "going well (with a slight stutter in the US)" already priced into it. If xero continue with 80% growth etc and do well in the US then the share price in 4 years time will be (in my humble opinion) about $25.

[Fisherboy3]

Rod Drury, is that you?

I think unless Xero can gain any sort of traction in the US, an SP of $80 isn't going to happen. Not in the next couple of years anyway. The share price as it stands is pricing in a lot of future growth. The company has a good track record of delivering 80% growth per year but that will tail off.

And the share price growth for a growing company is going to tail off before the sales growth. Share price is a leading indicator indicator of sentiment.

I'd say $80 in 4 years maybe, if everything goes well. Two years is dreaming, especially if US sales carry on as poorly as they have.


I'm more saying its def worth $20 now so there is only upside. There is no way xero will be less than $20 in 4 years and coming from your reasonably cynical point of view (nothing wrong with that!) it may reach $80 in four years so nothing to lose at$20 and everything to gain.

[dingoNZ]

I'm more saying its def worth $20 now so there is only upside. There is no way xero will be less than $20 in 4 years and coming from your reasonably cynical point of view (nothing wrong with that!) it may reach $80 in four years so nothing to lose at$20 and everything to gain.

Thats very optimistic brother, remember the next lot of results are out in October and I honestly think they will miss US expectations on subscription numbers.

Only time will tell, I'm still a firm believer in the product and a holder but my short term expectations are for it to fall lower.

[Chaowee88]

I'm more saying its def worth $20 now so there is only upside. There is no way xero will be less than $20 in 4 years and coming from your reasonably cynical point of view (nothing wrong with that!) it may reach $80 in four years so nothing to lose at$20 and everything to gain.

How is Xero actually worth $20 now????

@ $20 the market cap is just over 2.5 billion. The annualized revenue has just exceeded 100 million May 2014. Let just give XERO the benefit of the doubt that they can continue to grow at 80% revenue YOY. That would give XERO a P/S ratio of approx 16.6X. Assuming 80% further on 2016 would yield a P/S ratio of 9.26. At 275 million. The hardest part is projecting when XERO will break even and become profitable. Looking at other cloud competitors in the US, some of them have revenues of 500 million and aren't anywhere near breaking even as they chase further growth... If XERO follows this path how long can they go before they'll need another cap raising?

[Fisherboy3]

Thats very optimistic brother, remember the next lot of results are out in October and I honestly think they will miss US expectations on subscription numbers.

Only time will tell, I'm still a firm believer in the product and a holder but my short term expectations are for it to fall lower.

I agree but xero has not put out growth expectations for the us, has stated it will take years in the US so the interim figures for the US are much less relevant than the UK growth rates which don't forget has a market twice the size of aus and nz combined.

[Fisherboy3]

How is Xero actually worth $20 now????

@ $20 the market cap is just over 2.5 billion. The annualized revenue has just exceeded 100 million May 2014. Let just give XERO the benefit of the doubt that they can continue to grow at 80% revenue YOY. That would give XERO a P/S ratio of approx 16.6X. Assuming 80% further on 2016 would yield a P/S ratio of 9.26. At 275 million. The hardest part is projecting when XERO will break even and become profitable. Looking at other cloud competitors in the US, some of them have revenues of 500 million and aren't anywhere near breaking even as they chase further growth... If XERO follows this path how long can they go before they'll need another cap raising?

Thats been an argument for over two years and there no doubt saas losses can go on for years like salesforce but also like salesforce there SP has also climbed keeping their market cap revenue multiple at 10-20 at the moment it's 10 with 30% growth. It's a similar business - sticky subscriptions at about $40 a month. http://blog.asmartbear.com/unprofitable-saas-business-model.html that's an article which questions the model.

[skid]

Xero has always been able to admit its mistakes early eg acclipse, xero personal. reading the article he wasn't comfortable in the job. Theres still no other credible 2nd place saas accountancy software provider in the US (see fox finance article) sage is about where myob is. fresh books (much smaller financial resources than xero) doing well in uk. iNtuit with a xero (copied) like user interface but clunky transactional processing not allota love for qbo (forums)' Ird and many banks still operate on ms-dos why is that relevant because it shows how hard it is to change your root programming language for your software look at nova. building robust software in this space takes years. Payroll and inventory need to be sorted in xero 500 programmers working on this but not easy to crack in a intuitive simple and reliable way. Banking 2.0 (pay straight from xero)and interim results are the next relevant news for xero SP. don't overlook UK 64million people vs Aussie 24 million so big UK market. Sage 8 billion market cap if xero gets 25% that's $2 billion. All accounting software companies admit cloud is the way of the future. Definitely going to get 10% of the US market. 25% UK and 50% of aus/nz for SME. if xero was worth $5 in 2012 it's worth $20 now IMHO. Interim results should push SP up same as what happened Sept 2012 after sept 2012 6 monthly results.

Maybe they should get them on to Nova Pay

[winner69]

Thats been an argument for over two years and there no doubt saas losses can go on for years like salesforce but also like salesforce there SP has also climbed keeping their market cap revenue multiple at 10-20 at the moment it's 10 with 30% growth. It's a similar business - sticky subscriptions at about $40 a month. http://blog.asmartbear.com/unprofitable-saas-business-model.html that's an article which questions the model.

Interesting article

The joke at the end reminded me of this story.

Indian shopkeeper sold his potatoes at cost much to chagrin of the shopkeeper up the road. How do you make money when you sell the potatoes at cost somebody asked him. When I sell the sack they came in ...that's me profit.

Back to Xero - business model says the bigger the losses now the bigger the eventual prize. And the losses still need to get bigger than they are now.

[mikeybycrikey]

So you are saying that investors now at $22 will make a return of 363% in the next 4 years? Come on that's pie in the sky stuff. The current price of $22 has all the "going well (with a slight stutter in the US)" already priced into it. If xero continue with 80% growth etc and do well in the US then the share price in 4 years time will be (in my humble opinion) about $25.

With saying $80 in four years, I was really replying to Fisherboy3, who was claiming $80 in 2 years. The emphasis should've been on the "maybe". $80 in four years is possible but that would be way at the upper end of my expectations.

I think unless they can crack the US market, they are going to struggle to ever reach $45 again. It's easy to put a sky-high valuation on a company when it's in the early stages but as time goes on it will need to deliver more and more of those expectations.

Personally, I would say that given the current rate of growth in NZ, Aus and UK, I'd give it a price of $15 today (excluding the US business). If they can get decent growth in the US (and that looks like it'll be a slow process), that could add another $25 to the SP over the next few years. That's a big maybe though.

These numbers are pretty rough but I'm basing the value above on 2M customers in 4 years if they don't get traction in the US, and 7M customers in 8 years if they do.

Also, it looks like some interesting things are going on like the tie-ups with Warehouse Stationary and Veda that could be worth money in the longer term if replicated worldwide, but they are currently so early that they have no real value.

Xero is very hard to value though. No one knows where the growth will stop. It could stop tomorrow, probably valuing the company at $5, otherwise the sky is the limit. Even $150 is a remote possibility if it really takes off in the States and they can increase ARPU too.

Overall, I regret not selling when it was at $44 but I still think there's life in the SP in the next few years.

[skid]

So you are saying that investors now at $22 will make a return of 363% in the next 4 years? Come on that's pie in the sky stuff. The current price of $22 has all the "going well (with a slight stutter in the US)" already priced into it. If xero continue with 80% growth etc and do well in the US then the share price in 4 years time will be (in my humble opinion) about $25.

Yes,I would have thought by now, people would have learned a lesson about pricing in future growth-Im sure the ''Gamblers'' will emerge again ,but for now the sensible investors are more in ''steady as she goes'' mode.

[mayday]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11323702

sp may dip further on Monday open, disc not holding

[biker]

I'm more saying its def worth $20 now so there is only upside. There is no way xero will be less than $20 in 4 years and coming from your reasonably cynical point of view (nothing wrong with that!) it may reach $80 in four years so nothing to lose at$20 and everything to gain.

Not sure how long you've been in or watching the market fisherboy but your comments take me back exactly 27 years.

Only upside? Nothing to lose? Yeah right.

[couta1]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11323702

sp may dip further on Monday open, disc not holding
Storm in a teacup, actually well balanced article but really someones not performing in their job so they are getting switched out for someone else happens everyday in some major company somewhere in the world.

[Dentie]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11323702

sp may dip further on Monday open, disc not holding

Here's Rod's comments on Peter's appointment back in February ...

Xero CEO Rod Drury comments “We are thrilled to have Peter join our team and lead
our US business. His proven leadership, comprehensive familiarity with the B2B market
in North America in both accounting and payments will help our drive for growth in the
USA where there are over 29 million small businesses.”

and yesterday ...

Drury said [...] it had become clear that Karpas didn't have the right set of skills for what the company needed.

Hmmmm...I don't know about "a storm in a teacup" Couta... it's the US we're talking about here ... I was over there a week or so ago and they were talking about it being Hurricane season already.....

This stock has been overvalued from real early on - not that anyone wanted to listen.

Not trying to be an 'I told you so"... simply trying to add a bit of balance

[Fisherboy3]

Not sure how long you've been in or watching the market fisherboy but your comments take me back exactly 27 years.

Only upside? Nothing to lose? Yeah right.

your broker probably told you not to buy xero shares in 2012 when it was $5 and 25 times revenue it's in that position again market cap 25 times revenue. I don't see what's changed in the fundamentals of the business yes a 1987 crash would affect its SP (it has already had a major downward correction or crash anyway) but
don't forget xero went thru the GFC it's SP suffered then recovered because it a strong business with no debt unlike judgecorp/equitycorp and some of those ridiculous dotcom companies which had no revenue

[tosspot]

look if coutas gonna be like talking to a brick wall then fine let him be with his 50% and likely to be more loss. hes obviously not going to listen to any reasoning no matter how good it is, so lets get back on to the stock. and let see how this "storm" in the worlds biggest teacup will play out.

[Hoop]

AVOID



http://i458.photobucket.com/albums/qq306/Hoop_1/XRO12092014.png (http://s458.photobucket.com/user/Hoop_1/media/XRO12092014.png.html)

[winner69]

AVOID







http://i458.photobucket.com/albums/qq306/Hoop_1/XRO12092014.png (http://s458.photobucket.com/user/Hoop_1/media/XRO12092014.png.html)

Nice chart Hoop - channels are just as good in a downtrend as well as an uptrend eh

Disappointed you didn't highlight the DEATH CROSS at around 32/33 mark

I take it you don't subscribe to the old it was once 45 bucks so 21 bucks is so so cheap theory?

[winner69]

Sparky's mate Ben Graham once said "operations for profit should be based not on optimism but on arithmetic." Hussman said in this weeks letter that careful arithmetic is important in order to resist the temptation to rely on what Graham called "some generalized statement, sound enough within its proper field, but twisted to fit the speculative mania."

For example, many investors casually dismiss valuations today by 'this time it's different' (my quote). But as Hussman says they do so without doing the associated arithmetic, and without recognizing that even those higher "justified" valuations will still be associated with poor subsequent equity returns.

This where we are at with xero I feel

Even if it all goes to plan a shareprice of $25 in 5 years time now? The Future is Now.

[couta1]

Thanks NG for your comments, tosspot I do listen to peoples comments and reasoning but I don't give up on things easily (Must be all those years of hard core marathon running and off shore fishing I guess) Anyway I'll shut up from now on, on this thread and let time be the final judge. PS-I don't mind storms as long as I'm confident the vessel im in can handle the storm and ride it out,cheers

[Baa_Baa]

Hey nice chart Hoop. I agree with your "Avoid" (buying at the moment) sentiment, though some will have XRO on close "Watch" as price descends into an area with major support, particularly as it approaches 100% retrace of the major move from Oct 2013. Here's my take on it:

Support at:
$21.00 minor
$20.20 major
$18.50 minor
$17.00 major x2

6248

[winner69]

Hey nice chart Hoop. I agree with your "Avoid" (buying at the moment) sentiment, though some will have XRO on close "Watch" as price descends into an area with major support, particularly as it approaches 100% retrace of the major move from Oct 2013. Here's my take on it:

Support at:
$21.00 minor
$20.20 major
$18.50 minor
$17.00 major x2

6248

All other key Fibonacci support levels have been broken so suppose a 100% retracement is on the cards

Quite a feat eh ......a 100% retracement that is

[Hoop]

Nice chart Hoop - channels are just as good in a downtrend as well as an uptrend eh

Disappointed you didn't highlight the DEATH CROSS at around 32/33 mark Sorry..been using EMA's lately and their crosses are no better than MA's with XRO's quick and volatile price swings

I take it you don't subscribe to the old it was once 45 bucks so 21 bucks is so so cheap theory? does my inferred opinion look that obvious ;)




All other key Fibonacci support levels have been broken so suppose a 100% retracement is on the cards

Quite a feat eh ......a 100% retracement that is

It would be quite a feat for XRO as 100% retracement from the beginning of the uptrend would be about $1 to $2 ....Couta would not be happy about that scenario Winner...http://www.sharetrader.co.nz/images/smilies/thumbdown.gif

Nice spooky fibs though..first capitulation stopped and rallied around $29 (38.2%) 2nd capitulation stopped and rallied around $23 (50%) and now another capitulation after a bull trap (a common event in a bear cycle)...Stop target around $18 (61.2%)???

More spooky is the 61.8 fib retrace target area is around projected (future) major conjunction areas as outlined on Baa Baa's excellent more detailed chart....
We would all hope that (~$18) could be the bottom and a new bull calf born but unfortunately us mere mortals have no divine powers to make it so

TA Predictions are odds related at best and not a certainty, but its fun trying..eh:D

[winner69]

It would be quite a feat for XRO as 100% retracement from the beginning of the uptrend would be about $1 to $2 ....Couta would not be happy about that scenario Winner...http://www.sharetrader.co.nz/images/smilies/thumbdown.gif

Nice spooky fibs though..first capitulation stopped and rallied around $29 (38.2%) 2nd capitulation stopped and rallied around $23 (50%) and now another capitulation after a bull trap (not an unusual event in a bear cycle)...target around $18 (61.2%)??? More spooky is the 61.8 fib retrace target area is around projected (future) major conjunction areas outlined on Baa Baa's excellent more detailed chart....

However predictions are odds related at best and not a certainty but its fun trying..eh:D

I was referring to fib points based on the major move from Oct last year that baabaa mentioned .....ie retracing back to 18 bucks odd.

Yes fibs are spooky, but we shouldn't be surprised as it is only nature at work.

So $18 bucks seem a certainty ......cheap as then?

[Hoop]

I was referring to fib points based on the major move from Oct last year that baabaa mentioned .....ie retracing back to 18 bucks odd.

Yes fibs are spooky, but we shouldn't be surprised as it is only nature at work.

So $18 bucks seem a certainty ......cheap as then?

Sadly.. Mr Market cares diddly squat what I think.:(..but I'll try with a Sunday night desperation chart..

http://i458.photobucket.com/albums/qq306/Hoop_1/XRObear12092014.png (http://s458.photobucket.com/user/Hoop_1/media/XRObear12092014.png.html)

[mayday]

http://www.nbr.co.nz/article/deutsche-bank-rates-xero-sell-target-price-1890-share-bd-161125

aged news yet I may consider to get in once sp is sub $18 providing that happens in next few months

[winner69]

http://www.nbr.co.nz/article/deutsche-bank-rates-xero-sell-target-price-1890-share-bd-161125

aged news yet I may consider to get in once sp is sub $18 providing that happens in next few months

Wonder if Deutsche will go even lower in light of an implicit admission things not going to plan in the US

If they push US growth out a year or so their DCF valuation should reduce.

Maybe Deutsche are a forgiving type of analyst.

[BFG]

Massively overshoots, now looking to massively undershoot.

Xero's real name Shooter McGavin???

[Hawkeye]

http://www.radiolive.co.nz/Rod-Drury-CEO-Xero/tabid/506/articleID/54587/Default.aspx

[axe]

http://www.radiolive.co.nz/Rod-Drury-CEO-Xero/tabid/506/articleID/54587/Default.aspx


Rod says "incredibly well positioned"

[Jay]

Rod says "incredibly well positioned"

He must have been reading percy's posts!

[RGR367]

Rod says "incredibly well positioned"

For the impatient among us, it will still be 2 to 3 years to really say USA has been cracked. I, for one will be happy to wait that long.

[Shore]

Ever the optimist, I see some good points from his interview.

1) This move does seem linked to their IPO in some way. He mentioned in here (and some place else I can't remember), that part of the reason for Peter's departure was feedback from investment banking community and general strategy towards their IPO. I know the vesting date is coming up for last years capital raise, but it would seem pretty odd that any of those investors would part with shares when there's clearly a determined effort to list in the US.

2) Announcement sounds like it's coming soon for replacement, plus more between now and Christmas as the gear towards IPO.

3) Growth rate for US at this point is the highest out of all the territories (at same point in life cycle). This was announced earlier, but it's good to hear it's still the case. It's especially encouraging considering 70% of their customer in the US are coming direct rather than being delivered to them through an established partner channel. Imagine what happens in 3-5 years when the US does catch up and a partner channel emerges.

4) I think UK is a key market to watch. Xero are increasingly under stronger competition now, so it would be very interesting to see how their platform and partner channel holds up in the face of more competition. If they can continue to build up huge numbers and growth rates in the UK (a previously conversative market now catching on), then I'd be confident they can pull off a significant level of success in the USA.

Just some thoughts.

[Fisherboy3]

I'm interested to hear how holders/believers think the market will react competitively to the threat posed by xero, particularly in the US. How does the underlying lack of IP protection affect the likelihood of success??

Intuit has been doing that - giving huge discounts to Intuit in UK, dropping the price in the US, adding a xero like interface, going into Aussie. Intuit is known for playing hardball as well. Xero hasn't had IP protection for 7 years. Meanwhile freshbooks is working hard on partner channels in the UK and MYOB and sage are persisting. That's why it is important to keep an eye on how users/accountants rate the product and the company in reviews and forums but at the moment its a stronger product in that its platform which took 7 years to build is just plain and simple more intuitive and quicker. How hard is that to replicate? - Hard - MYOB having been at it for three years. Intuit have been going extremely hard at it for two years with the benefit of being able to attempt to reverse engineer xero. Meanwhile the xero product is getting better all the time its banking 2.0 is all but here it has been heavily involved with the major banks to achieve this and both xero and the banks have invested time and money in it. In the meantime Inuit have pissed allot of their customers/partners off and are simply looking for a new credible product which xero definetely and without a doubt is.

[Bobcat.]

Pivotal times. Will XRO find legs around a double bottom at just above $20?

It would be worth a punt today at these levels if Global Equity markets weren't looking so fragile. Ever since the S&P500 broke 2000 there's been a lot more selling pressure.

I for one am staying out for now.

[Chaowee88]

Stay away from this. Chart looks sickly, fundamentals say overvalued. Markets look like they have peaked. Everything says NO don't touch...

[Wolf]

Man so many people downramping the stock i'm almost keen to buy :t_up:
Quite the contrast from XRO at $40

[lambton]

Stay away from this. Chart looks sickly, fundamentals say overvalued. Markets look like they have peaked. Everything says NO don't touch...

Started by Wolf ends as Woof!

[Wolf]

Started by Wolf ends as Woof!

hahaha Not today! :)

[tzbang]

Still looks kinda dodgy to me, but 20.15 might have been the bottom again..

[skid]

Especially taking into consideration the Nasdac hit a 1 month low as a result of internet stocks--I was pretty surprised with the gain today.

But setting the past price aside-$20 is still a fair bit of coin.

[Copper]

Especially taking into consideration the Nasdac hit a 1 month low as a result of internet stocks--I was pretty surprised with the gain today.

But setting the past price aside-$20 is still a fair bit of coin.
As an aussy penny dreadful investor I can often think of it as a 20 cent stock rising to 21...You don't get that ""I've lost my retirement savings"". syndrome quite so badly....

[winner69]

Especially taking into consideration the Nasdac hit a 1 month low as a result of internet stocks--I was pretty surprised with the gain today.

But setting the past price aside-$20 is still a fair bit of coin.

Nasdaq on fire overnight

Good day for XRO thn?

[Leftfield]

Nasdaq on fire overnight

Good day for XRO thn?

Must admit I've been quietly adding a few XRO to my portfolio in the low $20's. The SP has tested the $20 level a couple of times since the $40 dollar highs and $20 seems to be holding. IMHO it will be v unlikely to retreat to Thiel's buy-in price of $18 (but you never know.) I think it is a risky share, however I also like the vision and the product and see considerable upside in the long term.

[skid]

As an aussy penny dreadful investor I can often think of it as a 20 cent stock rising to 21...You don't get that ""I've lost my retirement savings"". syndrome quite so badly....

Until it happens

[moimoi]

For those who maybe interested Peter Thiel is a guest host for 2 hours tonight on CNBC's Squawk box...

[Copper]

For those who maybe interested Peter Thiel is a guest host for 2 hours tonight on CNBC's Squawk box...
I watched the TV and it did not really touch Xero but all the hallmarks of what he thought a good Company needed were present in Xero IMHO.On the more personal side I can see a Xero Directors meeting coinciding in NZ with an event at Sir Peter Jackson's Lord Of The Rings headquarters as his favourite book is the Tolkien piece....Tks again Moimoi for the reference.

[Everwood]

Can someone please give me an overview what is said in this article on nbr? "Drury on pending US hire, and how it will help in war for hearts & minds of analysts"

[Hawkeye]

http://www.nbr.co.nz/opinion/drury-hearts-minds-xero-ck-p

[Hawkeye]

Sorry i didn't read the above post n/m

[Harvey Specter]

Can someone please give me an overview what is said in this article on nbr? "Drury on pending US hire, and how it will help in war for hearts & minds of analysts"


http://www.nbr.co.nz/opinion/drury-hearts-minds-xero-ck-pUS IPO not for cash - they have plenty. It is for marketing so they are seen as a "real"/US company.

IR manager needed as it is a big game with analysts (my interpretation)

Vote National (unless you're in TTT in which case vote @NgatiBird - from his twitter feed) but does want more big vision stuff from National.

[Everwood]

US IPO not for cash - they have plenty. It is for marketing so they are seen as a "real"/US company.

IR manager needed as it is a big game with analysts (my interpretation)

Vote National (unless you're in TTT in which case vote @NgatiBird - from his twitter feed) but does want more big vision stuff from National.

Thank you for the information!

[hummerh40]

no trades so far today?

[Copper]

no trades so far today?

I suppose if you are an insto fund manager it would be not the done thing to trade the day before an election.They will all be at morning tea arguing who is going to win and who will marry with who.They will all know the answer and the result so will do nothing.A bit like..."Yes Minister"

[Markymarknz]

Can you imagine the scare it gives an investor when your portfolio looks like this. If this really happened to the share price I would be pretty happy that it was only a "hypothetical purchase" for me.

6257

[Toasty]

Can you imagine the scare it gives an investor when your portfolio looks like this. If this really happened to the share price I would be pretty happy that it was only a "hypothetical purchase" for me.

6257

I don't quite see the point here. It is not a likely scenario for many shares that I am aware of. Even Rakon seems to hover on the edge of extinction and yet offers many opportunities for investors to make money.

Are you trying to induce some sort of fear into Xero investors? What would be the purpose of this. Are you trying to clumsily manipulate the market for some reason? Are you posting this same comment on other threads perhaps? I shall go and see.

[couta1]

Agreed Toasty seems a completely pointless exercise to me a bit like imagining Kim.Con as NZs next prime minister.

[Toasty]

His other posts look normal so I am assuming that this is not some lame trolling attempt. Perhaps just a random outburst?

[Markymarknz]

His other posts look normal so I am assuming that this is not some lame trolling attempt. Perhaps just a random outburst?

Sorry nothing malicious intended. I use ft.com to track a mixture of portfolios. One being my actual investments, another being investments in a share club I am part of and so on. I made one portfolio called "hypothetical purchases" a year or so back to see what returns I would have made by investing $10,000 in XRO. Today it just so happens that ft.com is not accurately displaying the XRO share price. I was just saying it gives you a fright to see but its obviously just incorrectly displaying.

I read ST a lot but just don't post much. Hope this makes sense :)

Here look it seems to have fixed itself
6258

[Toasty]

Sorry nothing malicious intended. I use ft.com to track a mixture of portfolios. One being my actual investments, another being investments in a share club I am part of and so on. I made one portfolio called "hypothetical purchases" a year or so back to see what returns I would have made by investing $10,000 in XRO. Today it just so happens that ft.com is not accurately displaying the XRO share price. I was just saying it gives you a fright to see but its obviously just incorrectly displaying.

I read ST a lot but just don't post much. Hope this makes sense :)

Here look it seems to have fixed itself
6258

Ahh, good old context. Phew. Looks like quite a useful tool.

[Markymarknz]

Ahh, good old context. Phew. Looks like quite a useful tool.

Sorry I didn't explain it very well the first time. It is quite useful....useful to know in hindsight how 'fricken awesome' it would have been to have invested 10k in Xero at the start of 2009 :P

[RGR367]

From the article http://www.stuff.co.nz/business/industries/10519659/No-guts-no-glory-for-Xero-boss
"What the critics are saying about Xero's US strategy is exactly the same as the criticisms we heard about launching in Australia and the UK - that we couldn't catch MYOB and Sage," Drury says. The detail he ignores is that the critics are still saying that, and with good reason. Australia may be Xero's largest market these days but MYOB, which is headed for the ASX itself, is still a long way ahead. Xero is even further off catching Sage in the UK.
--------
The above is a subtle signal for me to buy more :)

[hummerh40]

price has been quite steady over the last few trading days - quite uncanny for Xero. Over quite low volume though

[tzbang]

still appears to be an overall downward trajectory though.. 32.50 dropped to 23.50 before bouncing to 26.50.. then dropping to 20.17 and bouncing to $25.50 then dropping to $20 bouncing to $21.70. Each bounce is smaller than the last. Predicting next it will drop past the 20 support to bounce off 18 to $20. Pure speculation though I don't really know what I'm talking about..

[BFG]

still appears to be an overall downward trajectory though.. 32.50 dropped to 23.50 before bouncing to 26.50.. then dropping to 20.17 and bouncing to $25.50 then dropping to $20 bouncing to $21.70. Each bounce is smaller than the last. Predicting next it will drop past the 20 support to bounce off 18 to $20. Pure speculation though I don't really know what I'm talking about..

What you just described is a downward trend channel with lower lows and lower highs marking the outline of said trend. Just like the English Channel, this makes the stock very ruff ;)

[Everwood]

If anyone is interested, Rod Drury will be on 3rd Degree tonight starting at 8:30pm on TV3.

[luigi]

MYOB hits 100,000 online subscribers. (http://www.scoop.co.nz/stories/BU1409/S00858/myob-reaches-record-online-milestone.htm) I assume this is mostly Aus + NZ. Quite far behind Xero.

[Santiago]

With the next presentation scheduled for 9 Oct, which will surely be a foreshadowing of the half year results to the end of September (to be released late Nov), I'd be interested in any thoughts on what sort of numbers we should be expecting. They reported around 280000 paying customers at the end of March, and were expecting around 80% growth. I'd be hoping for 380000+ customers at the end of Sept, looking out to 500000ish by next March. Any other perspectives?

In terms of where those customers are, I'm expecting pretty strong growth in Australia, and the beginning of a similar sort of curve in the UK. The unknown is, of course, North America, but personally I'm not expecting too much there for a few years. I hope to see the UK take off in 2015, and sustained growth in Oz.

In terms of revenue, with the falling NZD, there could be an upside surprise. At this stage I'm not following the revenue numbers as closely as customers.

Interested to to hear any speculation as we head toward 9 Oct. Given where the SP has been over the last six months, this investor presentation is going to be pretty important, I reckon.

[skid]

The 3rd degree was an interesting watch--Kind of a combination of ''local co. makes good'' and ''How I lost my money on it''
One thing that was evident was the task ahead of them with their competition (in the US) and that is where the companies fate will most likely be decided.
Its a ''David and Goliath'' battle.
Thats not to say that Xero wont win the battle,but it did bring things into perspective,especially in relation to those share holders who were starting to refer to XRO as an almost blue chip stock.
It will be good for NZ if they succeed-we need more than just meat and dairy (Have'nt heard the ''rock star economy'' being bantered around so much lately,now that dairy prices have fallen)

Lets see if the show has any effect on todays SP

[tzbang]

That was kind of funny how he bought shares and then watched them plummet. It was also interesting how when asked if he has considered any sort of 'plan b' if the US doesn't go according to plan, Rod simply refuses to acknowledge a US failure. Is it inspiringly confident? Or blind faith?

[skid]

It was probably being realistic in a way (they really need the States)--also from a PR point of view ,it would be breaking basic rules of ''Public relations 101''

Talking about what you would do if you fail, or that you created your co. just to sell,is not a way to instil faith in your dream.

[Shore]

Rod should have asked Phil Luddite Vine to define "failure in the US". That would have caught him on the hop.

[skid]

That was kind of funny how he bought shares and then watched them plummet. It was also interesting how when asked if he has considered any sort of 'plan b' if the US doesn't go according to plan, Rod simply refuses to acknowledge a US failure. Is it inspiringly confident? Or blind faith?

And amusing that he bought something like 4 shares (and lost his future Doc Martins):)

[skid]

Rod should have asked Phil Luddite Vine to define "failure in the US". That would have caught him on the hop.

I think there must be some sort of ''critical mass'' that would define that.--people want to be with a system that they know is going to still be around in 10 years time

[skid]

I caught most of this show, and thought that this particular part was pretty poorly handled. Sure, its good to say that you really believe in the goal, but to look like you have no contingency plan? FFS. Dangerous stuff. Glad I'm not holding.
best of luck to those who are!

(I also though that Rod and the xero stuff really tried too hard to look like they worked in a fun/zany/wacky place. I mean, really?)


Guess the point was to imitate those wildly successful co.s like Google (although it would be a bit hard to be coming up with a ground breaking new addition to the soft ware while being pummeled by those balls):)

[Onion]

And amusing that he bought something like 4 shares (and lost his future Doc Martins):)

I think they said he lost $25 but I wonder if they counted the brokerage -- include $60 brokerage and he actually lost a big proportion of his initial stake (maybe 25 + 60 = $85 loss out of maybe a $100 investment).

[skid]

He made a good point though about share holder hype not having much to do with the actual running of the company .
Thats a good lesson

[skid]

I think they said he lost $25 but I wonder if they counted the brokerage -- include $60 brokerage and he actually lost a big proportion of his initial stake (maybe 25 + 60 = $85 loss out of maybe a $100 investment).

I think they referred to his SP going down 30% so it must have been made a while back,or he bought on the way down.
If he had bought @42 and sold now ,thats almost 50% (but I guess thats nit picking,in terms of the point made)

[skid]

Not for those that got caught up in it

[mikeybycrikey]

I caught most of this show, and thought that this particular part was pretty poorly handled. Sure, its good to say that you really believe in the goal, but to look like you have no contingency plan? FFS. Dangerous stuff. Glad I'm not holding.

Xero's plan for the US is to have the best product out there and sell it to people. There is no need for a contingency plan because there can't be one.

Any sort of contingency is going to be in refining the features and the timeline for rolling out those features and in changing the method for selling the product. It is not going to be one major change to effect success if the US strategy fails, it's going to be dozens or hundreds of small changes to get the US strategy working.

If Xero has faith in the product (and the success in NZ, AU and UK shows that that is warranted) then what else should they be doing?

[Harvey Specter]

Xero's plan for the US is to have the best product out there and sell it to people. There is no need for a contingency plan because there can't be one.

Any sort of contingency is going to be in refining the features and the timeline for rolling out those features and in changing the method for selling the product. Agree and we can see that with them bringing out payroll as a required feature.

[RGR367]

(I also though that Rod and the xero stuff really tried too hard to look like they worked in a fun/zany/wacky place. I mean, really?)

Just for an added info, my son worked for Xero. Compared to his previous job, he told me that working there is really having fun. They were having that shooting game as part of their socializing when that 3rd Degree show came in for a visit. So that wasn't staged at all.

[Toasty]

I would have thought that the plan B would be to pull out of any unprofitable markets (the US in this example) and concentrate on the markets where you are profitable/ dominant (NZ, AUS,UK etc) and become the dominant provider. MYOB is only in a couple of markets and they have been around for ages and I assume make a profit. I couldn't be bothered checking.

It wouldn't be the great success that everybody would like but it would still be a formidable company in its chosen markets. I don't really see this happening though as they don't actually have to win in the States, they just have to grab enough market share to be a viable alternative to QuickBooks. Then they can nestle in and become a slow profitable behemoth for a few years.

[Shore]

Again, I struggle to get the obsession with the idea of failure in the US meaning Xero would 'crash and burn' as Ben Kepes insinuated. Cloud accounting is the future of the industry. With boots on the ground, cash in the bank, a listing in the works, and being the leader in NZ, UK, and Aus - Xero has positioned as the best challenger to reap the rewards of that burgeoning market. There's not really much else they can do. They've executed perfectly until now and they're doing all they can to ensure success. Yes, Xero is a tech company, but I disagree that it should be subjected to the similar criticisms and concerns leveled against other tech companies whose fundamentals are far more shaky. Compared to Twitter (who is still actually trying to find a business model), or Zynga (whose business model relies on being able to continually pull something out of the hat on a quarterly basis and operates in an environment where competition can be come from any angle, funded or otherwise), I've always believed Xero has put to bed any fear of it suddenly disappearing overnight. The fact that Ben Kepes, somebody who supposedly covers this space, would even allude to the prospect was very surprising. Xero is now a bedrock for over 350,000 businesses worldwide (a market segment that actually willing to spend money as opposed to consumers who expect stuff for free), hundreds of millions invested in its software, over 7 years to build (with 1000 staff now improving it every day), and yet Ben Kepes can't refrain from lumping Xero in with all tech stocks and making a grandiose statement that they can fall as quickly as they rise.

What would it take for them to crash and burn? I mean, Xero are going to get to 1 million and beyond regardless of what happens in the US. Competition isn't going to come from an upstart in a corner garage like other tech stocks might be at risk of. This is a different space. Competition can only arrive from the desktop incumbents who, admittedly, have finally come to the party. But their execution has proven to be dire. Intuit and MYOB and Sage are all like McDonalds. They've reluctantly put a McCafe into their operation, despite the fact that they'd just much rather be serving fries. They all be may driving on the same road now but Xero is the one actually paving the road and determining the direction. They are the ones bringing vision and innovation to the space - just look at stuff like Banking 2.0 initiative - you don't see anything like this coming out of the incumbents. They're too busy trying to work out how to explain to their aging customer base that there's gonna be no more CD's, no more boxes.

I also thought Phil Vine demonstrated his own prejudices in the piece, continually referring to the work Xero does as boring and unimaginative, and questioning why Rod wouldn't just sell up and take the cash, and then questioning if NZ can really be pulled forward by a 'bunch of geeks'. I thought it was pretty depressing indictment on NZ journalism to be honest. This isn't 1995. The internet is not a new thing. You might have expected a segment like this last century, but I would have thought we would have come a long way since then. Clearly not.

[Shore]

And all this fixation on Plan B is just ridiculous.

IF Xero arrived from nowhere and had been given $200m to build the product and launch in the US, then yes, they would need a plan B.

Xero already have their plan B. It's called NZ, Australia, the UK, Canada, South Africa, Singapore, and all the other markets in which are they are quickly building a brand and customer base. Xero have cash in the bank. They are going to be an incredibly strong and well-positioned company no matter what happens in the US.

[gv1]

They're too busy trying to work out how to explain to their aging customer base that there's gonna be no more CD's, no more boxes.

I also thought Phil Vine demonstrated his own prejudices in the piece, continually referring to the work Xero does as boring and unimaginative, and questioning why Rod wouldn't just sell up and take the cash, and then questioning if NZ can really be pulled forward by a 'bunch of geeks'. I thought it was pretty depressing indictment on NZ journalism to be honest. This isn't 1995. The internet is not a new thing. You might have expected a segment like this last century, but I would have thought we would have come a long way since then. Clearly not.[/QUOTE]

Totally agree. Its the mindset of some.

[mikeybycrikey]

So are you saying that a $1 or $2 billion company trying to crack the most difficult market in the world shouldn't have a plan B, especially given the strength of incumbents???

Yes, pretty much that's what I'm saying. Just in the same way that Apple (a $600B company) comes out with a new iPhone every year, but they don't have plan B if people don't want it. They create the best product they can and expect people to buy it on its merits. And next year they will create an even better iPhone. They have faith in the product but that doesn't mean you need to have that same faith.

Software (especially online software) is different from most other products too. It can be continuously updated as needs change. Xero next week will be better than Xero was last week. But it will still be the best accounting software they can make.

I would like to think that they have some idea why their product offering isn't getting the growth in the US that shareholders expect and they are working to solve problems found.

If Xero's "Plan A" is to make "beautiful accounting software for small to medium businesses", that is a pretty broad plan. There's no room for a plan B but that doesn't mean their current plan can't change direction.

An example is in the recent article in the Herald after Peter Karpas left (http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11323386) where Rod Drury says that the litigious nature of the US meant accountants didn't readily recommend software to customers, which had been part of Xero's sale strategy in other markets.

This says to me that they are looking at a change in their sales strategy for the US but it's not plan B, it's an iteration of the original plan. Lot of little changes not a big change to plan B.

[hummerh40]

single order of 500,000 just gone through...a cool $10,500,000

[Fisherboy3]

They're too busy trying to work out how to explain to their aging customer base that there's gonna be no more CD's, no more boxes.

I also thought Phil Vine demonstrated his own prejudices in the piece, continually referring to the work Xero does as boring and unimaginative, and questioning why Rod wouldn't just sell up and take the cash, and then questioning if NZ can really be pulled forward by a 'bunch of geeks'. I thought it was pretty depressing indictment on NZ journalism to be honest. This isn't 1995. The internet is not a new thing. You might have expected a segment like this last century, but I would have thought we would have come a long way since then. Clearly not.

Totally agree. Its the mindset of some.[/QUOTE]

I agree what a shocker Very superficial I mean they didn't even bother interviewing anyone relevant from the US just the same hacks with the same opinions like a 3 year old broken record. I'm just surprised they didn't interview Darren Rickards or even the Doctor - hell that's a coincidence They both have the same initials - DR - and the same opinion on xero

[dingoNZ]

I think we may see some strong downward pressure today, with the NASDAQ being slammed overnight.

[Baa_Baa]

@DingoNZ .. yes agree Naz overnight looks ugly, XRO (and other techs?) may take a lead from that.

XRO price chart suggests good support at a smidge over $20, then again at the 61.8% fib at around $19.05 (of the entire move since Jan'12!), then more strong support between $18 and $17.6 (the 100%! retrace of the move since Oct'13), with last gasp support around $17 under which is another major support at around $15. heaven forbid for the 'buy and holds'. ;)

[Apathy]

I think the South Park boys had the strategy down pat on last nights show - 1) Start up 2) Cash In 3) Sell Out 4) Bro Down ......... and let's face it why wouldn't it be a fun place to work - cash in the bank, no expectation to make a profit! In fact outside of public service I challenge everyone to find a happier group of people losing money at even half the rate they do! More than that - who was the genius at Xero that thought it would be a good idea to highlight party time? They have just lost their US head and written of 1/3rd of the share price..

[Beagle]

http://digitalfirst.com/2014/04/24/accounting-file-xeros-position-hard-defend/?utm_source=Outbrain&utm_medium=cpc&utm_campaign=OutbrainWidget

Xero takes an interesting position around ownership of the file...I can't see business owners being happy about that.

[skid]

Again, I struggle to get the obsession with the idea of failure in the US meaning Xero would 'crash and burn' as Ben Kepes insinuated. Cloud accounting is the future of the industry. With boots on the ground, cash in the bank, a listing in the works, and being the leader in NZ, UK, and Aus - Xero has positioned as the best challenger to reap the rewards of that burgeoning market. There's not really much else they can do. They've executed perfectly until now and they're doing all they can to ensure success. Yes, Xero is a tech company, but I disagree that it should be subjected to the similar criticisms and concerns leveled against other tech companies whose fundamentals are far more shaky. Compared to Twitter (who is still actually trying to find a business model), or Zynga (whose business model relies on being able to continually pull something out of the hat on a quarterly basis and operates in an environment where competition can be come from any angle, funded or otherwise), I've always believed Xero has put to bed any fear of it suddenly disappearing overnight. The fact that Ben Kepes, somebody who supposedly covers this space, would even allude to the prospect was very surprising. Xero is now a bedrock for over 350,000 businesses worldwide (a market segment that actually willing to spend money as opposed to consumers who expect stuff for free), hundreds of millions invested in its software, over 7 years to build (with 1000 staff now improving it every day), and yet Ben Kepes can't refrain from lumping Xero in with all tech stocks and making a grandiose statement that they can fall as quickly as they rise.

What would it take for them to crash and burn? I mean, Xero are going to get to 1 million and beyond regardless of what happens in the US. Competition isn't going to come from an upstart in a corner garage like other tech stocks might be at risk of. This is a different space. Competition can only arrive from the desktop incumbents who, admittedly, have finally come to the party. But their execution has proven to be dire. Intuit and MYOB and Sage are all like McDonalds. They've reluctantly put a McCafe into their operation, despite the fact that they'd just much rather be serving fries. They all be may driving on the same road now but Xero is the one actually paving the road and determining the direction. They are the ones bringing vision and innovation to the space - just look at stuff like Banking 2.0 initiative - you don't see anything like this coming out of the incumbents. They're too busy trying to work out how to explain to their aging customer base that there's gonna be no more CD's, no more boxes.

I also thought Phil Vine demonstrated his own prejudices in the piece, continually referring to the work Xero does as boring and unimaginative, and questioning why Rod wouldn't just sell up and take the cash, and then questioning if NZ can really be pulled forward by a 'bunch of geeks'. I thought it was pretty depressing indictment on NZ journalism to be honest. This isn't 1995. The internet is not a new thing. You might have expected a segment like this last century, but I would have thought we would have come a long way since then. Clearly not.


Failure in the US may not cause Xero as a company to ''crash and burn''----as long as your content with a SP of $3

[skid]

Again, I struggle to get the obsession with the idea of failure in the US meaning Xero would 'crash and burn' as Ben Kepes insinuated. Cloud accounting is the future of the industry. With boots on the ground, cash in the bank, a listing in the works, and being the leader in NZ, UK, and Aus - Xero has positioned as the best challenger to reap the rewards of that burgeoning market. There's not really much else they can do. They've executed perfectly until now and they're doing all they can to ensure success. Yes, Xero is a tech company, but I disagree that it should be subjected to the similar criticisms and concerns leveled against other tech companies whose fundamentals are far more shaky. Compared to Twitter (who is still actually trying to find a business model), or Zynga (whose business model relies on being able to continually pull something out of the hat on a quarterly basis and operates in an environment where competition can be come from any angle, funded or otherwise), I've always believed Xero has put to bed any fear of it suddenly disappearing overnight. The fact that Ben Kepes, somebody who supposedly covers this space, would even allude to the prospect was very surprising. Xero is now a bedrock for over 350,000 businesses worldwide (a market segment that actually willing to spend money as opposed to consumers who expect stuff for free), hundreds of millions invested in its software, over 7 years to build (with 1000 staff now improving it every day), and yet Ben Kepes can't refrain from lumping Xero in with all tech stocks and making a grandiose statement that they can fall as quickly as they rise.

What would it take for them to crash and burn? I mean, Xero are going to get to 1 million and beyond regardless of what happens in the US. Competition isn't going to come from an upstart in a corner garage like other tech stocks might be at risk of. This is a different space. Competition can only arrive from the desktop incumbents who, admittedly, have finally come to the party. But their execution has proven to be dire. Intuit and MYOB and Sage are all like McDonalds. They've reluctantly put a McCafe into their operation, despite the fact that they'd just much rather be serving fries. They all be may driving on the same road now but Xero is the one actually paving the road and determining the direction. They are the ones bringing vision and innovation to the space - just look at stuff like Banking 2.0 initiative - you don't see anything like this coming out of the incumbents. They're too busy trying to work out how to explain to their aging customer base that there's gonna be no more CD's, no more boxes.

I also thought Phil Vine demonstrated his own prejudices in the piece, continually referring to the work Xero does as boring and unimaginative, and questioning why Rod wouldn't just sell up and take the cash, and then questioning if NZ can really be pulled forward by a 'bunch of geeks'. I thought it was pretty depressing indictment on NZ journalism to be honest. This isn't 1995. The internet is not a new thing. You might have expected a segment like this last century, but I would have thought we would have come a long way since then. Clearly not.


Failure in the US may not cause Xero as a company to ''crash and burn''----as long as your content with a SP of $3

[couta1]

Failure in the US may not cause Xero as a company to ''crash and burn''----as long as your content with a SP of $3

That sounds a bit far fetched skid if they get their million customers from whereever why would the company not be worth at least its current value?

[blackcap]

That sounds a bit far fetched skid if they get their million customers from whereever why would the company not be worth at least its current value?

No.

Couta1, a lot of the share price you see now has "phenomenal growth in the USA" already factored into it. If this does not happen the share price will be savagely re-rated.

[youngatheart]

Sorry that this is slightly off topic but am looking forward to this coming here soon. Broker disruptor (http://www.gizmag.com/robinhood-zero-commission-stock-trading-app/33963/)

[skid]

I keep reading on here how Xero is light years ahead of the competition,but Ive just read 3 articles comparing them to the other majors,and it just does'nt seem to be the case--seems more what you need it for is the important thing as they all have their plus and minuses

example

http://digitalfirst.com/2014/03/05/xero-vs-myob-accountright-live-comparison-second-opinion/

[kiwi_on_OE]

Here are my estimates for customer numbers, I expect them to be pretty close to the actuals: -
Xero (NZ) 31/3 102k, 30/9 118k
Xero (Aus) 31/3 109k, 30/9 157k
Xero (UK) 31/3 47k, 30/9 60k
Xero (US) 31/3 18k, 30/9 21k
Xero (Int) 31/3 8k, 30/9 11k
Xero (Tot) 31/3 284k, 30/9 367k
MYOB (online) 30/9 100k
Intuit (US online) 31/3 560k, 30/6 599k, 30/9 ?
Intuit (Int online) 31/3 64k, 30/6 84k, 30/9 ?
Intuit (Tot online) 31/3 624k, 30/6 683k, 30/9 715k (Intuit forecast)

Thought I'd throw in numbers for MYOB that luigi posted a few days ago, and also Intuit numbers for comparative purposes. It looks like the US has been pretty poor for Xero, it's their worst performing area, and where expectations are highest. On the other hand their percentage growth is comparable to Intuit in the US.

Xero are forecasting 80% revenue growth for the FY. If I translate that back to customer growth then they expect to get to over 500k users. NZ is plodding along, Aus has had their mid-calendar year peak. US has a start of calendar year peak, but it would seem a stretch to me for them to get to 500k from where they are now. Downward revision in their next release?

[Casino]

Here are my estimates for customer numbers, I expect them to be pretty close to the actuals:
Xero (Tot) 31/3 284k, 30/9 367k


My estimate: 360k



Intuit (Tot online) 31/3 624k, 30/6 683k, 30/9 715k (Intuit forecast)



My estimate: 740k



MYOB (online) 30/9 100k


Meaningless number.




but it would seem a stretch to me for them to get to 500k from where they are now.


My estimate: 445k by end of March

[mikeybycrikey]

it would seem a stretch to me for them to get to 500k from where they are now. Downward revision in their next release?

New Zealand dollar has been dropping. That might help bump the NZD revenue figures up, especially if it falls further against the AUD. Highlights an important distinction between revenue growth and customer growth for an international company.

[brend]

MYOB online is totally crap and is years behind xero.

We have a few unimpressed clients who migrated to myob essentials and were disappointed.

Myob have also launched a GST cashbook product which is $6 cheaper than xero.

disc holding.

[RGR367]

My estimate: 360k



My estimate: 740k



Meaningless number.




My estimate: 445k by end of March

I'll be the ever cheerful pessimist to say that your estimate on XRO is short by another couple of thousands more :) As for Intuit and/or MYOB, I'll be happy for them to get any numbers as long as XRO is moving more forward than them.

[artemis]

Interesting article in the NBR from Lance Wiggs, using Xero as an example of impact of NZD fall.

"My take is that the fall from the end of May to today would increase their estimated monthly revenue by about 4.3%."

and

"Obviously this is only for revenue received after the exchange rate changes, so don’t expect any surprises when Xero announces their September revenue, although their Annualised Run Rate might have a boost."

He also calculates the effect on Xero of the 'Goldilocks' rate of .65. Nice ...

http://www.nbr.co.nz/article/bonus-growth-saas-exporters-th-163236

[Casino]

Interesting article in the NBR from Lance Wiggs, using Xero as an example of impact of NZD fall.

"My take is that the fall from the end of May to today would increase their estimated monthly revenue by about 4.3%."

and

"Obviously this is only for revenue received after the exchange rate changes, so don’t expect any surprises when Xero announces their September revenue, although their Annualised Run Rate might have a boost."

He also calculates the effect on Xero of the 'Goldilocks' rate of .65. Nice ...

http://www.nbr.co.nz/article/bonus-growth-saas-exporters-th-163236

And what is the net effect?

Let's look at last quarter's result:

Receipts from customers: 23.4m
Receipts from overseas customers:15m (~65% of Xero customers are overseas)

Expenses: 45m

The net effect is only positive if more than two thirds of all expenses are incurred here. My gut feeling is that it makes little difference.

[macduffy]

From FN Arena:

"Credit Suisse rates XRO as Outperform (1) - Credit Suisse is adjusting near-term estimates. The main change is a downgrade to US customer estimates, reflecting recent news flow and the lack of traction that is apparent to date.
The broker expects the October customer update to be a key catalyst while a potential US listing in 2015 could harness attention over the coming year. An Outperform rating and NZ$43.00 target are maintained.
Current Price is $19.22. Target price not assessed.
The company's fiscal year ends in March. Credit Suisse forecasts a full year FY15 dividend of 0.00 cents and EPS of minus 46.37 cents .
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 41.45."

[dingoNZ]

From FN Arena:

"Credit Suisse rates XRO as Outperform (1) - Credit Suisse is adjusting near-term estimates. The main change is a downgrade to US customer estimates, reflecting recent news flow and the lack of traction that is apparent to date.
The broker expects the October customer update to be a key catalyst while a potential US listing in 2015 could harness attention over the coming year. An Outperform rating and NZ$43.00 target are maintained.
Current Price is $19.22. Target price not assessed.
The company's fiscal year ends in March. Credit Suisse forecasts a full year FY15 dividend of 0.00 cents and EPS of minus 46.37 cents .
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 41.45."

First NZ*

They have been unrealistic for some time with up until yesterday having a target price of the around $45, whilst every other analyst is in the $20's...

[Casino]

Credit Suisse forecasts a full year FY15 dividend of 0.00 cents and EPS of minus 46.37 cents .


At least they are very precise forecasting a loss of $59287233.8649

[Hawkeye]

First NZ*

They have been unrealistic for some time with up until yesterday having a target price of the around $45, whilst every other analyst is in the $20's...


Unrealistic? You could say that, but they were also the only ones saying $45 before it went up to $45, so perhaps its a matter of perspective...

[dingoNZ]

Unrealistic? You could say that, but they were also the only ones saying $45 before it went up to $45, so perhaps its a matter of perspective...


Um, no they weren't, they were one of the last to follow other analysts.

[dingoNZ]

Results out overnight (unsure why they released it US time?)

https://www.xero.com/media/3952543/xero-grows-revenue-85percent.pdf

[Santiago]

Pretty impressive, though I have no idea how the market will take it. If you consider that NZ is maturing and diminishing as a percentage of overall numbers, as Aust, UK and US pick up, the growth could really continue to be spectacular for some years to come. And some pretty honest commentary about what's working and what's not in the US- I like that they don't try and gloss over the issues.

[Leftfield]

Pretty impressive, though I have no idea how the market will take it. If you consider that NZ is maturing and diminishing as a percentage of overall numbers, as Aust, UK and US pick up, the growth could really continue to be spectacular for some years to come. And some pretty honest commentary about what's working and what's not in the US- I like that they don't try and gloss over the issues.
Agree...UK and Aus results v impressive. USA merely a work in progress.

[Shore]

A great result in my opinion. The markets to watch were Australia and the UK because Xero is coming under quite sustained competition there now, especially from Intuit in Australia who have taken out confrontational ad campaigns and discounted their Quickbooks product down to nothing for accountants. These numbers are very encouraging because it doesn't seem to be denting Xero's momentum.

[Casino]

A great result in my opinion. The markets to watch were Australia and the UK because Xero is coming under quite sustained competition there now, especially from Intuit in Australia who have taken out confrontational ad campaigns and discounted their Quickbooks product down to nothing for accountants. These numbers are very encouraging because it doesn't seem to be denting Xero's momentum.

I agree. Intuit isn't in Australia to make money. They have done really well despite that. Xero could return the favour and inflict a lot of pain in the US.

[winner69]

Rhetoric seems to imply that new customer growth is accelerating.

At a total level yes as new customer growth in H115 was 87,000 compared to 73,000 customers in H214 (the previous half)

From the numbers this morning Australia added 49,000 new customers this half v 30,000 the previous quarter. Customer base up 45% over the half

NZ numbers grew by 17,000 compared to 16,000 in previous half - so still chugging along with customer base increasing 17% over the half.

UK grew by 14,000 but this was down on the 17,000 the previous half (summer a bad time?). Customer base only grew by 30% in this half.(and off a low base still)

North America is slack as - only 4,000 new customers this half which was only half the 8,000 increase in the previous half. Customer base only grew by 22% in this year. Only explanation North America is work in progress and lets hope like hell. Don't think Intuit would have lost too much sleep knowing Xero only increased their customer base by 4,000 over the last six months.

Last 3 halves new customers have been 54,000, 73,000 and 87,000 and total customers now 371,000. Bloody good numbers but that 1 million customers seems a long long way off. Australia is the only bright light keeping the big dream alive

[Casino]

Rhetoric seems to imply that new customer growth is accelerating.

At a total level yes as new customer growth in H115 was 87,000 compared to 73,000 customers in H214 (the previous half)

From the numbers this morning Australia added 49,000 new customers this half v 30,000 the previous quarter. Customer base up 45% over the half

NZ numbers grew by 17,000 compared to 16,000 in previous half - so still chugging along with customer base increasing 17% over the half.

UK grew by 14,000 but this was down on the 17,000 the previous half (summer a bad time?). Customer base only grew by 30% in this half.(and off a low base still)

North America is slack as - only 4,000 new customers this half which was only half the 8,000 increase in the previous half. Customer base only grew by 22% in this year. Only explanation North America is work in progress and lets hope like hell. Don't think Intuit would have lost too much sleep knowing Xero only increased their customer base by 4,000 over the last six months.

Last 3 halves new customers have been 54,000, 73,000 and 87,000 and total customers now 371,000. Bloody good numbers but that 1 million customers seems a long long way off. Australia is the only bright light keeping the big dream alive

I see an acceleration. As at late July, customer growth was 12.5k per month (slide 6 https://www.nzx.com/files/attachments/197240.pdf). But for the last 6 months the average jumped to 14.5k. The last two months (August/September) must have been particularly good with customer growth rates similar to Intuit's.

[tzbang]

Their total customer numbers look like they are beyond the best case 'Scenario 4' from Claire Capitals Oct 2013 valuation report.

[Toasty]

It's clear that they are never going to capture the USA market. Even the UK growth numbers are soft when you compare the size of the market. They are miles behind in both markets.

Xero is going to become the "antipodean" accounting company.

They don't need to "capture" these markets. They just need to be considered a viable choice. The markets are huge and even a relatively small percentage would see significant revenues.

[winner69]

So on that Slide 6 of this mornings update how far is the blue bar going to move along the grey bar?

Why I ask Australia growing fantastically fast. Even applying 80% growth rate decay factor the projection is 1.9 million customers in 2020 but that's almost 100% market share. Whoops can't apply exponential growth to that extent here can I

Looking at the half year numbers they seem to get a decent boost when Xerocons (love that word) are in different countries and then fall back a bit. The power of marketing eh.

[winner69]

I see an acceleration. As at late July, customer growth was 12.5k per month (slide 6 https://www.nzx.com/files/attachments/197240.pdf). But for the last 6 months the average jumped to 14.5k. The last two months (August/September) must have been particularly good with customer growth rates similar to Intuit's.

All because of Australia I reckon ......xerocons and skateboards etc?

[winner69]

What's up - XRO were on the gainers this morning ....now on the losers board

[winner69]

Preso today says cash $171m

That implies cash out (hate the word burn as it suggestive of just throwing it on the fire never to be seen again) of $21m this quarter following the $17m in the first quarter. First half $38m in total

No argument ... accelerating here anyway

[winner69]

Xero posts steady revenue growth
http://www.stuff.co.nz/business/industries/10597546/Xero-posts-steady-revenue-growth

Analysts remain troubled by Xero's sales trajectories outside its engine rooms in Australia and New Zealand, despite the company reporting steady overall growth in its half-yearly update.


The Wellington online accounting firm reported that its global work force had topped 1000 and said expatriate Kiwi Andy Lark would join the company next month as its chief marketing officer.

Xero said its subscription revenue grew 85 per cent to reach $52 million during the six months to the end of September, and it confirmed its July guidance that it expected about an 80 per cent annual increase in sales in the year to March, before taking into account any movements in the dollar.

It has yet to release its audited interim results but said it expected its loss to be about $25m.

Xero shares were down 0.8 per cent at $21 in mid-afternoon trading.

Woodward Partners analyst Nick Lewis said a "fantastic" 115 per cent jump in Xero's Australian revenue to $23.9m for the half-year was stronger than he had expected.

He said that was offset by a lower than expected doubling of its sales in the "conservative" British market, which contributed $8m to its interim revenue.

Xero's sales in New Zealand, where its business is more mature, rose 42 per cent to $15.1m.

Xero's interim revenue in North America grew 131 per cent to $3m, year on year, but its 22,000 customers there still accounted for less than 6 per cent of its total sales.

Forsyth Barr was concerned the update showed Xero had added only 4000 customers in North America during the six-month period.
Analyst Blair Galpin said that was "slow progress", which overshadowed its strong growth in Australia.

Forsyth Barr upped its forecast of Xero's annual loss to $50m, cut its target share price by $1.25 to $20.50 and reduced its stock rating to "underperform".

Galpin noted that investors who participated in a $180m capital raising last year would be free to trade the 9.9 million shares they acquired in a week's time.

Many of the shares held in escrow were owned by United States investors, and Xero would need to show them how it would gain traction in that market, he said.

Lewis said Xero was not gathering steam in the US. "This is a disappointment for everybody, I'm sure."
He said Xero had consumed $40m of cash during the six-month period and that as the company was still hiring, a day of reckoning was approaching.

"Our prediction is they will want to raise more capital in about a year's time," he said.

"But absent of a 'US growth story' it will be really hard to pull off a Nasdaq listing. So they have got 12 months to sort the US out."

Ad Feedback



Xero said Lark, as its global chief marketing officer, would help its drive into the US.

It is still recruiting to replace former PayPal vice-president Peter Karpas, who left Xero last month after seven months in charge of its US operations.

Lark is a former vice-president of marketing at computer-maker Dell and more recently chief marketing officer of the Commonwealth Bank in Australia, which he left last November after two-years.

One of the most active members of the Kiwi expat tech community, Lark describes himself on his website, The Daily Lark, as a "prolific writer, blogger and speaker on marketing, technology and Web 2.0".

He is on the board of Christchurch software maker SLI Systems, Mighty River Power and Wellington information technology services firm Fronde, which has a possible NZX listing on the backburner.

Xero spokeswoman Janna Wilkinson said Lark would continue to reside in Sydney but would travel to all Xero's major markets.

[Santiago]

The problem is that the price per subscription will continue to go down with increased competition. 5 years from now (in the USA) it will be as low as $9 per month plan or less. Even with a small percentage of the market it will not be sustainable under the pressure of increased marketing costs and development.

It's a mathematical certainty that Xero will either merge or experience a "myspace" type exodus to the market leader.

Explain this "mathematical certainty". Myspace and Facebook are free. People migrated as one was better than the other in terms of quality and features. If you're a small business, paying $30 or $9 a month is a pretty minimal difference- quality and features will be the determining factor. Sure, some will go with the cheapest in terms of upfront cost, but many will go with quality. Tell me it's a mathematical certainty that Apple will lose the smartphone market to Nokia... Oops, actually, they already won that battle, even though they sell their phones for way over twice the price... Apples and oranges.

[winner69]

Their total customer numbers look like they are beyond the best case 'Scenario 4' from Claire Capitals Oct 2013 valuation report.

Beyond meaning doing better than scenario 4? Or is scenario 4 a bridge too far, ie beyond them?

I reckon 480k to 500k customers in fy15 which puts it between scenarios 2 and 3, closer to 2 than 3?

Which puts Clare valuation at $7 to $15 (more shares since they did that report)

Suppose we need to go back to that extrapolation chart later in the report ....at least that has XRO shareprice at $80 to $200+ in 2017

http://clarecapital.co.nz/cc-content/uploads/2014/01/Clare-Capital-Xero-Thoughts-20131003.pdf

[Harvey Specter]

Theils backs businesses where 80% of the DCF value is beyond 2024. I don't think Clare capital is accounting for this. Also no value is given to the value of the data they hold, or expansion into other areas.

I haven't read 0 to 1 yet but did listen to the class he took at Sam Altmans Stanford Course this week. An interesting watch if you are interested in what Theil looks for.

Edit: Link to the video meantioned: http://startupclass.samaltman.com/courses/lec05/ (50m)

[Toasty]

"He said that was offset by a lower than expected doubling of its sales in the "conservative" British market, which contributed $8m to its interim revenue."

I see what they are saying here but it kind of reads like sour grapes when you complain about a doubling of your sales.

[tzbang]

Beyond meaning doing better than scenario 4? Or is scenario 4 a bridge too far, ie beyond them?

I mean beyond as in better.. I thought Clare Capital put customer numbers at 326,250 in scenario 4 for 2014 but they're already at 371,000 or am I totally missing something?

[Hawkeye]

I mean beyond as in better.. I thought Clare Capital put customer numbers at 326,250 in scenario 4 for 2014 but they're already at 371,000 or am I totally missing something?


Ooooo, I didn't read it properly... maybe you are right, and they are ahead?

[Harvey Specter]

I mean beyond as in better.. I thought Clare Capital put customer numbers at 326,250 in scenario 4 for 2014 but they're already at 371,000 or am I totally missing something? We are 1/2 way through 2015. 2014 ends on 31 March 2014 and 2015 ends on 31 March 2015.

I'm optimistic they will hit scenario 3 and that the model does not reflect true long term value of US growth which is slower than analysts want.

[skid]

Explain this "mathematical certainty". Myspace and Facebook are free. People migrated as one was better than the other in terms of quality and features. If you're a small business, paying $30 or $9 a month is a pretty minimal difference- quality and features will be the determining factor. Sure, some will go with the cheapest in terms of upfront cost, but many will go with quality. Tell me it's a mathematical certainty that Apple will lose the smartphone market to Nokia... Oops, actually, they already won that battle, even though they sell their phones for way over twice the price... Apples and oranges.

Its a mathematical certainty Apple will lose the smartphone market to SAMSUNG---pick on someone your own size:)

ok maybe its not a mathematical certainty,but how can you compete with the crowd you buy your parts from/ Apple sues Samsung==Samsung raises the price of their parts.

Ok ..back to Xero----This info has not come at a good time---See US stock market

The wild card for this (and other) growth stocks seems to be on the marketing side of things--The product is good-(except that ownership of data thing is a bit of a worry) but how well is it promoted.
Promoting the product(marketing)is an art form --they need to excel at that.
Hell,if they can convince people to spend more for a liter of water,than petrol,in a country like NZ,they surely can convince people to use Xero anywhere.
A brilliant marketing guru would would (is?)be worth his/her weight in gold

[winner69]

I mean beyond as in better.. I thought Clare Capital put customer numbers at 326,250 in scenario 4 for 2014 but they're already at 371,000 or am I totally missing something?


When Clare says 2014 he means FY14 (Xero financial year) which is at March 2014

March number was 284,000 wasn't it

[Hawkeye]

http://www.nbr.co.nz/article/analyst-downgrades-xero-wake-trading-update-citing-us-ck-p-163745

[winner69]

http://www.nbr.co.nz/article/analyst-downgrades-xero-wake-trading-update-citing-us-ck-p-163745

Show off .....

[Hawkeye]

Show off .....

Too much time on my hands more like, if only I had used in more practically and learnt to type faster, then I could share it with those who do not pay

[tzbang]

I wonder where it will bounce this time. Xero is such a wild stock

[robbo24]

I wonder where it will bounce this time. Xero is such a wild stock

Tripple botty rebound from 20? Or Double bottom fail through 20?

Just looking at those MACD and RSI bottoms, it could go either way for mine!

:D:D

Not playing with it today that's for sure.

:D

[winner69]

Too much time on my hands more like, if only I had used in more practically and learnt to type faster, then I could share it with those who do not pay

Interesting though

Little wonder some downgrades though

Jeez 4,000 new accounts in North America in 6 months - that's only about 33 a day with the weekends off.

[robbo24]

Jeez 4,000 new accounts in North America in 6 months - that's only about 33 a day with the weekends off.

Winner, I remember your growth curve graphs for DIL...

Got any of the good stuff for XRO?

[Santiago]

Its a mathematical certainty Apple will lose the smartphone market to SAMSUNG---pick on someone your own size:)

ok maybe its not a mathematical certainty,but how can you compete with the crowd you buy your parts from/ Apple sues Samsung==Samsung raises the price of their parts.

Ok ..back to Xero----This info has not come at a good time---See US stock market

The wild card for this (and other) growth stocks seems to be on the marketing side of things--The product is good-(except that ownership of data thing is a bit of a worry) but how well is it promoted.
Promoting the product(marketing)is an art form --they need to excel at that.
Hell,if they can convince people to spend more for a liter of water,than petrol,in a country like NZ,they surely can convince people to use Xero anywhere.
A brilliant marketing guru would would (is?)be worth his/her weight in gold

I think the point was that it will be quality and features that drives the outcome, and bloody good marketing as you point out. Added to that, Intuit is screwed if they drop the price too far- they're maintaining two platforms and I wouldn't be surprised if they were losing money everytime they signed a new customer. Deep pockets will come into it.

Definitely need to polish the product, make it a tax solution for the U.S. (anyone who has lived there knows that SME's most important relationship is not their accountant, it's their tax advisor), and get some hormone pumped, steroid sucking sales geniuses with targets bigger than their egos on this, and sell the crap out of it.

As as for the share price, at what point is it cheap? Given the U.S. market is behaving like a manic depressive standing on the edge of a cliff, we might some see bargains in the next few months, for anyone who has some cash...

[Chaowee88]

I think the point was that it will be quality and features that drives the outcome, and bloody good marketing as you point out. Added to that, Intuit is screwed if they drop the price too far- they're maintaining two platforms and I wouldn't be surprised if they were losing money everytime they signed a new customer. Deep pockets will come into it.

Definitely need to polish the product, make it a tax solution for the U.S. (anyone who has lived there knows that SME's most important relationship is not their accountant, it's their tax advisor), and get some hormone pumped, steroid sucking sales geniuses with targets bigger than their egos on this, and sell the crap out of it.

As as for the share price, at what point is it cheap? Given the U.S. market is behaving like a manic depressive standing on the edge of a cliff, we might some see bargains in the next few months, for anyone who has some cash...

Broken $20 barrier oh noooo

[warthog]

make it a tax solution for the U.S. (anyone who has lived there knows that SME's most important relationship is not their accountant, it's their tax advisor)

"The company is still finishing tax modules for several US states." (NBR piece linked above)

[tzbang]

As a business owner, I'm unconvinced that price is driving factor with accounting software. The extra few bucks a month for what is convenient and efficient gives more than it takes.

[Chaowee88]

Broken $20 barrier oh noooo

Support is looking razor thin, looks like it could free fall, but when support does come in it comes in fast.

[Fox]

Support is looking razor thin, looks like it could free fall, but when support does come in it comes in fast.
High volume buy came in just after your post. Maybe they all read your post or you took the initiative to begin the support :eek2:

[Hawkeye]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11340462

[Harvey Specter]

Definitely need to polish the product, make it a tax solution for the U.S. (anyone who has lived there knows that SME's most important relationship is not their accountant, it's their tax advisor), and get some hormone pumped, steroid sucking sales geniuses with targets bigger than their egos on this, and sell the crap out of it. Dont they have an agreement with H&R Block?


"The company is still finishing tax modules for several US states." (NBR piece linked above)State taxes complicate everything. Nasty things.

[Baa_Baa]

Well, an interesting day for XRO, with a poor NAZ overnight and a few analysts revising their estimates.

Also weighing on XRO may be the price chart which has now taken out the double bottom lows of Aug & Sep and currently testing support at just over $19 - being the 61.8% fib retrace of the entire move since early 2012, and coincidentally(?) also the 100% fib retrace of the breakout from Oct 2013. Technically this should be a strong support, however with only weak support at $18, $17 is the next really significant price support under the fib retraces.

6318

[RGR367]

Well, an interesting day for XRO, with a poor NAZ overnight and a few analysts revising their estimates.

Also weighing on XRO may be the price chart which has now taken out the double bottom lows of Aug & Sep and currently testing support at just over $19 - being the 61.8% fib retrace of the entire move since early 2012, and coincidentally(?) also the 100% fib retrace of the breakout from Oct 2013. Technically this should be a strong support, however with only weak support at $18, $17 is the next significant price support under the fib retraces.

Intuit is down too by almost 2 bucks so there must be another explanation out there re Cloud Accounting. But good buying price I would say for XRO :)

[RGR367]

Absolutely, just picked up a parcel at 1920 before the support kicked in :t_up:

Lucky you. My about to expire long time order got hit very early this morning on 2050. I don't mind as I've sold a lot when they we're at high 40's. Just returning some dough back to the market. I'm still buying on what I can get at the best price though. Just keeping faith to the story :p

[dingoNZ]

Intuit is down too by almost 2 bucks so there must be another explanation out there re Cloud Accounting. But good buying price I would say for XRO :)

A fair chunk of analyst coverage came out today for the instos. Not too sure if related or not, could be instos selling down.

Remember 9m shares come out of escrow next week (@ $18.15 fro the capital raising).

[skid]

Intuit is down too by almost 2 bucks so there must be another explanation out there re Cloud Accounting. But good buying price I would say for XRO :)

He says ,while the big elephant named DOW sits beside him in the room.:scared:

[Beagle]

You holders will be fine, those brokers who slapped XRO with a SELL today haven't got a clue, especially the one who's put a $15 price target on it.
Just hold for 5 years and you'll all be rolling in clover.

[BFG]

Ending on the days low with key support shattered. $15 doesn't seem unrealistic at all.

REPENT THINE SINNERS, THE END IS NIGH!!!

[Chaowee88]

Ending on the days low with key support shattered. $15 doesn't seem unrealistic at all.

REPENT THINE SINNERS, THE END IS NIGH!!!

More pain next week?

Charts look horrible, fundamentals still overpriced, resistance levels broken, doesn't look good at all.

[mikeybycrikey]

You holders will be fine, those brokers who slapped XRO with a SELL today haven't got a clue, especially the one who's put a $15 price target on it.
Just hold for 5 years and you'll all be rolling in clover.

Yep, at 4,000 US customers every 6 months, that clover will be coming thick and fast. Especially considering Xero have probably spent at least $5,000 to acquire each of those US customers.

Maybe those share certificates will be useful as fertiliser to help the clover grow.

Without traction in the US, $15 probably is a reasonable valuation.

[couta1]

Stockknocking anyone? Nah couldn't be.

[lambton]

Run run as fast as you can

[couta1]

Run run as fast as you can
You never run too fast at the start of a marathon better to come home fast in the second half.

[couta1]

Support is looking razor thin, looks like it could free fall, but when support does come in it comes in fast.
I see your post was quoted on stuff tonight Under Xero investors Fret meaning yourself:cool:

[Chaowee88]

I see your post was quoted on stuff tonight Under Xero investors Fret meaning yourself:cool:

Check my post on SUM thread about you Couta.

COPYRIGHT INFRINGEMENT
Here's the link:
http://i.stuff.co.nz/business/industries/10602525/Xero-has-now-lost-over-half-its-value

[Chaowee88]

I see your post was quoted on stuff tonight Under Xero investors Fret meaning yourself:cool:

Oh btw I'm not fretting over XERO because I don't hold any, and not looking to as this is far too overpriced.

I'll stick to my undervalued plays like JWI and APN which are rocking and rolling :)

[Goldstein]

I thought the US resignation was odd at the time. Usually a reason is given but there wasn't one. Just a thanks.

[couta1]

Oh btw I'm not fretting over XERO because I don't hold any, and not looking to as this is far too overpriced.

I'll stick to my undervalued plays like JWI and APN which are rocking and rolling :)
Time will tell, thanks for your post on Sum thread, i didnt say you were fretting the heading on the front page referred to your post and drew their own conclusions, im not fretting either but guts required to hang in there, 5 years from now we will both have our answer:cool:

[Casino]

You holders will be fine, those brokers who slapped XRO with a SELL today haven't got a clue, especially the one who's put a $15 price target on it.
Just hold for 5 years and you'll all be rolling in clover.

I can imagine how frustrated you must be after getting so much flak for warning others. But remember that you are not the one sitting one massive losses. It's all good if you learn the right lessons.

[Hoop]

Stockknocking anyone? Nah couldn't be.

Couta..In my opinion any stock that drops 61% over 7 months and is still dropping deserves to be stockknocked...

I said one word, a month ago (http://www.sharetrader.co.nz/showthread.php?4774-Xro-xero/page322) and having lost another 10% since then, and no change in the trend, that one word still applies now..

[couta1]

Couta..In my opinion any stock that drops 61% over 7 months and is still dropping deserves to be stockknocked...

I said one word, a month ago (http://www.sharetrader.co.nz/showthread.php?4774-Xro-xero/page322) and having lost another 10% since then, and no change in the trend, that one word still applies now..
Fair enough but that word doesn't apply to holders who are going long and of course the knockers aren't holders.

[dingoNZ]

You holders will be fine, those brokers who slapped XRO with a SELL today haven't got a clue, especially the one who's put a $15 price target on it.
Just hold for 5 years and you'll all be rolling in clover.


Funny, he has actually been the analyst who has been the most accurate with the price, he called it when it rose to $40+

[Beagle]

I'm on record many times in this thread as calling it back to $18. Most analysts have only just got on board where I've been calling it many months ago. Earlier comment was taking the piss.

[lambton]

This operation just burns cash and is still miles away from making a profit. Knockers some of us may be but also realists who hate throwing cash to the wind. Next stop $15 is my bet.

[Beagle]

This operation just burns cash and is still miles away from making a profit. Knockers some of us may be but also realists who hate throwing cash to the wind. Next stop $15 is my bet.

Totally agree. Growth in the U.S. has considerably undershot even my modest expectations so I expect the SP to keep heading south almost indefinitely until they can prove they can actually make money, (if that ever happens).

Hoop summed it up perfectly AVOID

[gv1]

They must be doing something right..doubling in Aus and UK. Proud to say its a NZ company and wish them all the best in their endeavours. We are never supporting all blacks when they are losing, or NZ team in Americas cup. All proud s/holders for long haul, a big salute too you all for the courage and faith in your company. For traders may be time for them to stick their nose some where else.

[lastmoa]

They must be doing something right..doubling in Aus and UK. Proud to say its a NZ company and wish them all the best in their endeavours. We are never supporting all blacks when they are losing, or NZ team in Americas cup. All proud s/holders for long haul, a big salute too you all for the courage and faith in your company. For traders may be time for them to stick their nose some where else.

Agree. They are killing it in NZ, Aust and UK with a good product and happy 'sticky' customer base. It amazes me such NZ bashes of Xero's admirable efforts thus far. For me, just the unravelling dominance in these markets justifies the current SP.
USA may be a harder nut to crack, but I do not see USA as the be all for Xero. If you can't handle the sp turbulence invest in Telecom (Spark).
I congratulate Rob for taking the recent Aust innovation award. Onward and upward and we must exercise patience as managements plan unravels. Hold long all.

[skid]

If your satisfied with Xero only being successful in NZ,England and Australia-then you should be prepared to be satisfied with a lower SP to reflect that.
Emotions dont make you money.
If you leave -the company you love will still be there when you get back.

And Coutts--Being in for the long haul doesnt have to mean never selling and buying back in--Its not a justification for taking a financial beating.

I know the subject of DIL has been beaten to death ,but Ill never forget reading one of the posts in the middle of the mayhem---"just kill me''

gv-Your not allowing much room between the ''courage and faith''in for the long haul-and Traders--Theres a whole lot in between

[gv1]

gv-Your not allowing much room between the ''courage and faith''in for the long haul-and Traders--Theres a whole lot in between[/QUOTE]
Yeah for it to become the apple of NZ.

[blackcap]

If the share price had not had the meteoric rise and fall I do not think we would be having these arguments. If the share price right now was $12 and that this $12 was its peak.. (ie it had climbed from $1 to $12 in the last 5 years) then people would be lauding this wonderful company with its innovative product (as it is) and expressing amazement at the phenomenal rise in share price and exploding wealth. (It normally takes between 20-25 years to grow wealth by 12 fold; (10%-13% compounding)) I guess traders and speculators were hoping for far more than an already phenomenally exceptional performance and have duly been disappointed. $40 and $5billion in capitalisation was a tall ask even with astronomic growth expectations.

[winner69]

We should forget what the doyen of NZ Tech commentators says in this tweet

Lance Wiggs @lancewiggs

Hard not be be wildly impressed with @Xero’s numbers. We have a genuine monster on our hands NZ. nzx.com/files/attachme…
12:25 a.m. Thu, Oct 9

[Beagle]

A monster that's going to chew a serious hole in some people's net worth if it doesn't start actually laying some golden eggs soon :D
Just look at the TA, the chart looks absolutly horrendous. Tech sector in the US coming back down to earth slowly, NASDAQ down another 2% overnight doesn't bode well for Monday's trading here :eek2:

[Harvey Specter]

We should forget what the doyen of NZ Tech commentators says in this tweet

Lance Wiggs @lancewiggs

Hard not be be wildly impressed with @Xero’s numbers. We have a genuine monster on our hands NZ. nzx.com/files/attachme…
12:25 a.m. Thu, Oct 9It is impressive. Over 80% growth again and it hasn't even taken off in its growth market. They are not afraid to try new things but will quickly fix them if they go wrong.

The investment decision is a different question. It obviously got ahead of itself at $40 but a price of $20 doesn't make it a failure. - the only failure is the gamblers who 'invested' at $40.

The market isn't always right. My 'guess' is $20 is probably fair value at the moment but I am a bit more optimistic on the U.S. market. Having said that, I won't be adding to my small investment till I see a turn around in investor sentiment - hopefully they will overshot on the downside and I will pick some more up cheap to recapture some of my current paperloss.

As a comparible - look at FBU. It got as high as $10, went down to $5 and is now higher again. A good business, impacted by short term factors which swings investor sentiment.

[kizame]

It is useful to have a look at the chart of xro, going back to jan 2012,till it got to $45,the fibonachi retracement on that upward trend is now at exactly 61.8,hopefully for all you holders this will be the turning point,but i guess we will see.
i think this company has a long way to go yet (upward),this is mearly a correction in a longer term trend imop.

[Arbroath]

I'm with you NewGuy - I've watched the Xero story for a few years but have never held. It is great the earlier holders, if they held on, did really well with this company. However, being an exciting company, well run etc does not mean a company is a great investment, and certainly not at any price. My guess is that the cash burn rate will see Xero needing to do a decent size capital raising (c. $150m) late next year or early 2016. And if they keep burning cash like they are without showing tangible results in the US then that raise will be at something like $10.

I like what Xero has done but it is a very hard company to value. If they don't win in the US and then turn to profitablity in NZ/Aust/UK and make say NZ$50m NPAT then what are they worth - once they are in profit then traditional valuation metrics will make it hard to value them at NZ$2b+ IMHO. But I wish them well and hope for NZ's sake they prove me wrong in the US market.

[winner69]

It is useful to have a look at the chart of xro, going back to jan 2012,till it got to $45,the fibonachi retracement on that upward trend is now at exactly 61.8,hopefully for all you holders this will be the turning point,but i guess we will see.
i think this company has a long way to go yet (upward),this is mearly a correction in a longer term trend imop.

You are so right with you Fibs

But Jan 12 seems a rather odd time to use as a base for such calculations

I'd prefer to look at the start of the big move a year ago when all that money was pumped in - around $18.15

Whoops nearly 100% retracement then - and Mr Fibonacci bless his sole did mention 100% in his thinking.

[Valuegrowth]

Now Xero is trading below $20. Tech stocks are falling amid a broad selloff in tech stocks.

[skid]

It is impressive. Over 80% growth again and it hasn't even taken off in its growth market. They are not afraid to try new things but will quickly fix them if they go wrong.

The investment decision is a different question. It obviously got ahead of itself at $40 but a price of $20 doesn't make it a failure. - the only failure is the gamblers who 'invested' at $40.

The market isn't always right. My 'guess' is $20 is probably fair value at the moment but I am a bit more optimistic on the U.S. market. Having said that, I won't be adding to my small investment till I see a turn around in investor sentiment - hopefully they will overshot on the downside and I will pick some more up cheap to recapture some of my current paperloss.

As a comparible - look at FBU. It got as high as $10, went down to $5 and is now higher again. A good business, impacted by short term factors which swings investor sentiment.

If $20 is your fair value estimate ,you may well get your chance to pick up some for cheap on Monday--until the next DOW session we wont know if the dust has settled yet though.

[barleeni]

In the article below it mentions that there are about circa $150 million worth of shares which have been on lock down for a while, with the holders being freed to sell from this coming Thursday. Any thoughts on market impact? will all of these flood the market and perhaps drive the SP lower? (similar to SLI?)

http://www.stuff.co.nz/business/industries/10604643/Xero-slump-but-gets-pat-on-back

[couta1]

In the article below it mentions that there are about circa $150 million worth of shares which have been on lock down for a while, with the holders being freed to sell from this coming Thursday. Any thoughts on market impact? will all of these flood the market and perhaps drive the SP lower? (similar to SLI?)

http://www.stuff.co.nz/business/industries/10604643/Xero-slump-but-gets-pat-on-back I'm guessing most holding will be in for the long haul and won't be as fickle as the stock knocking club and on the flip side for every big seller there must be a big buyer and no big buyer is going to waste millions unless they have a very good chance of making some good profit and would only buy if they believe the company will succeed and the share price will climb in the future, you would need to be extremely bold to short the stock at its current price levels.

[BFG]

Unfortunately, for every action there is an equal opposite reaction. Concordantly, as the stock vastly overshot, the stock will now vastly undershoot. As most stocks usually "take the stairs up and the elevator down", bubble stocks usually do the opposite (as per investor sentiment). Unfortunately, a confluence of events has afforded itself here whereby the company has vastly underperformed investor sentiment for its target market, the macro environment is beginning to tank, foreign money is flowing home and a large amount of shares are coming out of lockup.

Therefore, this weekend I suggest some light reading via A Random Walk Down Wall Street and a healthy viewing of The Perfect Storm on DVD or Blu-Ray.

[couta1]

Yes BFG I've watched The Perfect Storm a few times great film and I love the grit those guys showed, my question would be with this perfect storm forming who is going to buy this large amount of shares coming off lockdown (Assuming those holders wish to sell) ???

[BFG]

Yes BFG I've watched The Perfect Storm a few times great film and I love the grit those guys showed, my question would be with this perfect storm forming who is going to buy this large amount of shares coming off lockdown (Assuming those holders wish to sell) ???

"The market is a wealth transfer system from the impatient to the patient."

Timing also helps in this endeavour as well :)

[Casino]

Timing also helps in this endeavour as well :)

True. Can you imagine people suggesting $42 being a huge bargain ;)

[Casino]

Something that hasn't been discussed is the seasonality of the US market. 4000 in the last half doesn't compare well to 8000 in the previous. Then again it may not be surprising given that most businesses switch at the start of the year.
Also, Thiel/Matrix must have large parcels from earlier investments that have been out of escrow for a long time. This is not a recommendation to sell/hold/buy. Just something to consider before panicking.

[LegendOfRiot]

Is % growth vs the previous quarter/half actually a thing? When Apple reports post-holiday iPhone sales it's going to disappoint compared to holiday sales.

[axe]

% Growth is normally measured by growth vs the same time period LY. ie Q1 -15 vs Q2 16 etc for estabisled companies, but companies on a high growth trajectory will measure vs the previous qtr / month etc, and vs LY.

[skid]

Maybe by then the US market may have bounced big time--but if things carry on the trend that is starting then this couldnt come at a worse time.
So for you who love the share at all cost--you could sell and buy your share back at a cheaper price (and have more in your portfolio at the same price)
And for those who are not quite so optimistic---get out

Or of course you can sit and watch and get more and more aggravated with the ''knockers'' and the SP,but if your in for the long haul,you really technically shouldnt be watching the SP 2-3 times daily anyway IMO

Just my 3 cents no offense intended

[axe]

will it bounce tomorrow????

[BFG]

will it bounce tomorrow????

Bet you a Martin Jetpack it won't

[Harvey Specter]

will it bounce tomorrow????Nasdaq was down over 2% on Friday so I would say unlikely.


Bet you a Martin Jetpack it won'tMight need a few of those to rescue the 'investors' who bought in over $40

[hummerh40]

down 4% already

[Harvey Specter]

down 4% already6% with no buyer support.

Anyone with Balls of steel going to trade this.

[bull....]

17.50 odd maybe

[hummerh40]

6% with no buyer support.

Anyone with Balls of steel going to trade this.

spoke too soon, next support at around $16?

[bull....]

i hv support at 15

[couta1]

6% with no buyer support.

Anyone with Balls of steel going to trade this.
No just balls of steel to hold it from my buy price:cool:

[Harvey Specter]

Buyers coming in have pushed it back up to $18. My guess is it will still go lower.

[bull....]

i think it may go to 7 - 8 dollars if/ when the nasdaq goes bear

[Harvey Specter]

i think it may go to 7 - 8 dollars if/ when the nasdaq goes bearIf it gets that low, they will probably take it private.

The data they hold is worth that alone.

[Baa_Baa]

Minor support at $18, solid support at $17 and again at $15. These are all from long term price points giving horizontal or rising support lines. The orange line @ $20.20 (broken last Friday) is the 100% fib retrace of the move since Oct 2013 (and 61.8% of the entire move since Jan 2012).

DYODD it isn't a forecast for today (or this week), it's just a price chart ;)

[BFG]

Just as the stock goes up along the bollinger band, it also tanks along it. No real halfway house with bubbles. Everything in extremus.

Careful out there people.

[Beagle]

Some might like to reflect on history. Earlier this century when the tech bubble burst the NASDAQ lost 90% of its value before stabilising.
History would therefore suggest $4.50 isn't entirely out of the question.

[JimHickey]

Some might like to reflect on history. Earlier this century when the tech bubble burst the NASDAQ lost 90% of its value before stabilising.
History would therefore suggest $4.50 isn't entirely out of the question.Some might like to reflect on history. Pineapple is a fruit. History would therefore suggest $6,000 isn't entirely out of the question.

[tosspot]

If you were Rod Drury, what would you do. I personally would have sold a chunk a few months ago and now sell another large chunk. Its clear this thing is going to drop more and with the share coming out of escrow this week more pressure will be applied. I mean sure it would show a lack of confidence but man he must have balls of steel. IF this does drop back to $5-10 he would of watched hundreds of millions evaporate without acting on it.

[lastmoa]

If you were Rod Drury, what would you do. I personally would have sold a chunk a few months ago and now sell another large chunk. Its clear this thing is going to drop more and with the share coming out of escrow this week more pressure will be applied. I mean sure it would show a lack of confidence but man he must have balls of steel. IF this does drop back to $5-10 he would of watched hundreds of millions evaporate without acting on it.

Praise the Lord that Rod Drury and TossPot are so different then. Rod and his team are trying to builf something special and the gyrations of the sp are to be expected. It is still far north of the IPO and may indeed resume its upward trajectory in the near future. Some of us focus on company specific progress and for the most part things look impressive to me.
Remember this is a tech coy that has a proven SAAS model that shows revenue. This differs vastly from many .coms.
If Drury does indeed pull off being one of the USA's leading on -line accounting offerings he should be knighted. If not, he should be admired for at least stepping up and getting into the ring.

[Hoop]

Minor support at $18, solid support at $17 and again at $15. These are all from long term price points giving horizontal or rising support lines. The orange line @ $20.20 (broken last Friday) is the 100% fib retrace of the move since Oct 2013 (and 61.8% of the entire move since Jan 2012).

DYODD it isn't a forecast for today (or this week), it's just a price chart ;)

Baa Baa..That EMA 14 line you drew on the chart was very telling wasn't it...XRO price didn't want to go above it and when it meet the conjunction (EMA14/Primary downtrend line) it couldn't move sideways any longer so it broke down..unfortunately through one of the foundation supports..It's now at a stage when Rod can't blame all this price drop on market apathy..Time to start asking questions..eh?

[RGR367]

If you were Rod Drury, what would you do. I personally would have sold a chunk a few months ago and now sell another large chunk. Its clear this thing is going to drop more and with the share coming out of escrow this week more pressure will be applied. I mean sure it would show a lack of confidence but man he must have balls of steel. IF this does drop back to $5-10 he would of watched hundreds of millions evaporate without acting on it.

We must remember that Rod is an enterpreneur(sic) and would be risking it all, I guess, just to prove a point. He's not seeing failure in what the sp is so $5-10 would just be a very large paper loss :(

[tosspot]

We must remember that Rod is an enterpreneur(sic) and would be risking it all, I guess, just to prove a point. He's not seeing failure in what the sp is so $5-10 would just be a very large paper loss :(

yea that's what I was mostly thinking, but no matter what kind of person you are, seeing your money disappear in the hundreds of million must be hard to stomach.

[Baa_Baa]

Yeah Hoop, the 14EMA is a favourite. It's even better on a weekly chart ;) Check out the weekly chart below, there's only one trade on the entire chart, and it's the 'sell the bubble' 14EMA crossover. Simple indicators like this can help to inform people when to buy and when to sell - in the NZ market we can't short stocks so the real value is capital preservation (sell side crossover) and capital gain (buy side crossover). The weekly chart takes a lot of noise out of the price action, but is still very insightful.


Baa Baa..That EMA 14 line you drew on the chart was very telling wasn't it...XRO price didn't want to go above it and when it meet the conjunction (EMA14/Primary downtrend line) it couldn't move sideways any longer so it broke down..unfortunately through one of the foundation supports..It's now at a stage when Rod can't blame all this price drop on market apathy..Time to start asking questions..eh?

6342

[BFG]

Some seem to think Mr Drury is beholden to short-term market gyrations like traders. I suggest those people watch interviews with Rod again. He'll be looking at least 5-10 years down the track when he could be a multiBILLIONaire, not a mere multimillionaire. In the latest interview he also said he doesn't care about retiring/having a shed ton of money. He wants to work his a$$ and be constantly busy. A man truly dedicated to his company and not the share price. Very rare these days.

[Harvey Specter]

Indeed. And just to stir things up as the price drops even further today, he announces he hopes to have employeed another 500 staff in the next 12 months. There is no way he is stopping.

[kerry]

Praise the Lord that Rod Drury and TossPot are so different then. Rod and his team are trying to builf something special and the gyrations of the sp are to be expected. It is still far north of the IPO and may indeed resume its upward trajectory in the near future. Some of us focus on company specific progress and for the most part things look impressive to me.
Remember this is a tech coy that has a proven SAAS model that shows revenue. This differs vastly from many .coms.
If Drury does indeed pull off being one of the USA's leading on -line accounting offerings he should be knighted. If not, he should be admired for at least stepping up and getting into the ring.

My money is on Xero, and Rod Drury being knighted.

[bull....]

So if ya shorted it at say 40 you be up 55% in less than a yr at the moment

[longy]

That sounds about right. They will have to return those shares some how right?