Xro - xero

[Snoopy]

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


Heaven forbid the requirement for gaining a knighthood is reduced to lining your own pockets! Rod deserves respect for what he has achieved, but not a knighthood.

SNOOPY

[winner69]

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


wouldn't it be 170% if they bought at $18 to give back whence they came

[winner69]

If you bought back today you would have paid $18 and made $22 profit (less interest on shares loaned). I make that an approx 122% gain.

Correct - I take 18 off 40 and got 32 ... ha ha

[Casino]

Where did you get that idea? Of course you can short stocks in NZ.
https://www.forsythbarr.co.nz/investing-with-us/le-short-selling/

Besides, investors like Couta may be willing to lend you some of theirs since they are in for the long haul.

[winner69]

RadioNZ this morning had guy saying XRO will NOT WIN in the US

And Harbour guy saying XRO fat too expensive (I think that was what he was trying to say in Analyst speak)


Here it is
http://www.radionz.co.nz/audio/player/20153287

[BFG]

The talking heads have spoken! SELL SELL SELL!

Wonder if they were the same ones pushing Xero as worth over $50 a share or telling retailers to buy just a mere 6 months ago?

I'll answer Mr Harbour Asset managements "no comment" on Xero egging investors on as well. Of course they did. Drury is quoted as saying he hoped Xero would be worth $50 billion one day, and worries were definotely played down at AGM time.

Traders/investors most definitely had a part to play in all this as well, pushing the stock up 7-10% day after day after day chasing momentum.

The Xero bubble has popped after we all started believing it was fairly valued (complacency - huge warning sign!). We all had a part to play in the madness. Interesting times ahead.

[Intel]

This could get really nasty, really quickly. Lots of stock coming off escrow will most likely weigh neagtively on the stock, then couple this with the serious likelihood that it will drop out of the MSCI World Index, then you have a lot of stock that needs to find a home... Sell pressure could be huge come mid november.

[couta1]

This could get really nasty, really quickly. Lots of stock coming off escrow will most likely weigh neagtively on the stock, then couple this with the serious likelihood that it will drop out of the MSCI World Index, then you have a lot of stock that needs to find a home... Sell pressure could be huge come mid november.
So who's going to buy all these millions of shares supposedly about to be sold, answer only those that believe that Xro will ultimately be a success so for every negative there is a positive.

[skid]

Im with you Couts! I believe Xro will be a success(well,maybe not the States) Ill be waiting to jump in when the dust settles (at $5)

[dingoNZ]

Im with you Couts! I believe Xro will be a success(well,maybe not the States) Ill be waiting to jump in when the dust settles (at $5)


I do as well and think the company is great.

I think its time they cut their losses in the states and focus on the UK market until they can build up a war chest of cash ans reputation then reenter the states at a later time and capture some market share once they already have a firm grip on other markets.

[Baa_Baa]

Depth is looking vulnerable this morning, a queue for the exit.

[dingoNZ]

Depth is looking vulnerable this morning, a queue for the exit.


It will open sub $17.50 this morning

[bull....]

nasdaq smashed last hr looks like only one way today

[Hoop]

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.

I hope these guys at XRO have dusted off their old Economics 101 textbooks and have had a re-read of the Laws of Diminishing Returns before making that decision.

[dingoNZ]

Also note the US markets have really came off in the last hour, DOW down 1.35%, NASDAQ down 1.45%. Been put down to falling below the 200 day moving average. Expecting a weak day here now and XRO may be hit quiet hard.

[Carpenterjoe]

When this company hits 500million-1 billion in revenue it would make the current market cap of 2.2billion look pathetic. I think they need five percent of the American market to achieve that sort of revenue. I think this company is on track and I'm looking for I nice buy signal. Happy to watch the price drop.

[Stranger_Danger]

When this company hits 500million-1 billion in revenue it would make the current market cap of 2.2billion look pathetic. I think they need five percent of the American market to achieve that sort of revenue. I think this company is on track and I'm looking for I nice buy signal. Happy to watch the price drop.

Pathetic how? If they were doing a billion in revenue and still making losses, a market cap of 2.2 billion could easily be too high.

Investing isn't that simple. There is no rule that says a SAAS company should be on X times sales.

The assumption is that, long term, a well scaled B2B SAAS product is a license to print money.

The truth is, nobody knows for sure as this is a new business model.

Making assumptions on the new business model, based on old business models, is very dangerous.

It resembles investors buying "Triple A" tranches of sliced and diced sub-prime loans, originated by someone who didn't care, sliced up by someone who cared even less, then sold to a sucker. Their rationale? Charts and figures about the previous 100 years, which *in no way resembled the new situation*.

I'm not saying the long term economics of SAAS will be bad. I honestly don't know. I don't think anybody does.

While, until now, this lack of knowledge has been substituted by "blue sky", maybe we're entering the phase where it will be substituted by a discount, due to the risk of the unknown.

P.S One thing used to justify SAAS economics is to look at costs that boxed software had (distribution, manuals, retail margins etc), deduct, then assume wonderful economics. I wonder if that same person pondered rooms full of geeks trying to stop Chinese hackers, full time lawyers liasing with Government departments regarding which countries law applies to which piece of data etc etc. New business model. We really don't know exactly what it is that we don't know.

[couta1]

The only thing I know is I'm not going to participate in this current session of panic selling and that goes for all my stocks, others can if they want that's their choice.

[Carpenterjoe]

Pathetic how? If they were doing a billion in revenue and still making losses, a market cap of 2.2 billion could easily be too high.

Investing isn't that simple. There is no rule that says a SAAS company should be on X times sales.

The assumption is that, long term, a well scaled B2B SAAS product is a license to print money.

The truth is, nobody knows for sure as this is a new business model.

Making assumptions on the new business model, based on old business models, is very dangerous.

It resembles investors buying "Triple A" tranches of sliced and diced sub-prime loans, originated by someone who didn't care, sliced up by someone who cared even less, then sold to a sucker. Their rationale? Charts and figures about the previous 100 years, which *in no way resembled the situation those figures were drawn from*.

I'm not saying the long term economics of SAAS will be bad. I honestly don't know. I don't think anybody does.

While, until now, this lack of knowledge has been substituted by "blue sky", maybe we're entering the phase where it will be substituted by a discount, due to the risk of the unknown.

P.S One thing used to justify SAAS economics is to look at costs that boxed software had (distribution, manuals, retail margins etc), deduct, then assume wonderful economics. I wonder if that same person pondered rooms full of geeks trying to stop Chinese hackers, full time lawyers liasing with Government departments regarding which countries law applies to which piece of data etc etc. New business model. We really don't know exactly what it is that we don't know.

Stranger,

Your completely right

My Gut and brain enjoy this company, love the high risk, love the balls to run at a loss.

Its about potential, this company has the ability to hit massive revenue figures, yes it might take years and it might take two hundred million to do it.

Yes at some point this company will look away from high growth to profit margins.

But in the next few years let this company run, my gut is telling me this company will do great things.

Just my two cents for those nervous about their holdings

[Fisherboy3]

I wouldn't panic salesforce a loss making company with $4b revenue and a similar saas sub based revenue still has support so this is not a saas correction it's the xero US situation combined with Nasdaq losses combined with market fear. MYOB want $2.5b for the company. Xero has good traction in the acquisition of accounting partners very low partner/subscriber ratio typical of early adapter market albeit slower than NZ. Accountants will typically switch over a couple of suitable clients get to know the system and migrate more over the next three years.

[Santiago]

Panic selling mirroring the panic buying of a year ago. The song, however, remains largely the same, though with some timeframe tweaks. At the end of the day, they're still growing by over 100% in their main markets- a phenomenal rate. The only question is whether the world markets will tank further and therefore selling out and buying back in makes sense. Probably.

[Hoop]

Too true, hoop. I hope they also read the sections on switching costs (which are a huge benefit to xero's competitors)

It never pays to underestimate your competitors...Eh?........ I wonder how many forward projecting Fundamentalists have simply used extrapolating XRO growth trend without thinking just that...We haven't heard too much about switching costs have we ...yes, a great defensive mechanism for the Resident ..and one would only assume that when those Residents see their market becoming increasingly competitive, more defensive strategies would be deployed to make it even more expensive for a new competitor company like XRO to gain a foothold (customer)....

[abstractionsInsoftware]

Ok, im back from the deleted bin..now Xero, sorry Zero... is a nice little IIS product, standard MS stuff, nothing special really.. whats special is robs ability to get funding for bulk standard internet browser IIS developments, the development team understand internet development. it uses a standard rest api, so for example i could allow users all around the world to download and access Xero on there multi tasking windows laptops and there data from anywhere they have an internet connection and play with there xero data and for example play with it in MS Office.



i could also do the same for any other product that has an internet based database or XML based data service.

all good stuff right, check out the xero development center, once again nothing special there standard internet technologies.

once again nothing special....

now sorry about the stock price

but remember the old buffet rule

only invest in stock you understand, dont understand technology? well dont invest

if you do invest in this company and you dont know what a bulk standard IIS internet development is then take a punt, and the share price will take the punt with you.

Now be clear here little hobbits, this product is nothing special, throw enough money and people at a project and you will get a product.

Now some of you have been chatting away while i have been away saying stuff like this product is SPECIAL!!!!!!

Its not and there is not enough space here to tell you why Not.

But if you think money and people can take the battle field and win? The bet away, remember Henry V!!!

Xero has there bulk standard IIS applications running. The Americans cannot stop the apps running.

So while there is nothing special here you dont need something special to stay in the game and survive, you just need something that works....

and other people can come along and provide other special things or not so special things to make it better.

The problem is these other things can also run on OTHER peoples internet applications as well!!!!!!!

The idea that Xero cannot be replicated is not correct, take a look at the development specifications on there site and you will see that the transaction XML definitions are really very simple and do not allow for very many data attributes.

Data attributes will give you a hint as to how clever a system is... few attributes? well easy to supply data to and access which is good!!! KISS but for this to become something SPECIAL i am expecting to see a huge increase in the API and i MEAN HUGE!!!!

yes marketing is the key as you say, ride that wave....

now where is my Surf board!!!!!

is it really me?

once again little hobbits... love this SP graph, bough at 45 did we?

Dont know anything about IIS product technologies and you invested ? Oh dear..... perhaps you worked in an accounting office and you thought... this is a great product, its SPECIAL!!!!

Well lets hope lots of people just like you think so to because i for one want Zero to succeed... but its not going to be like you think .....

Notice when you develop for Xero it does not have a internet model for its applications that let you merge your services at the application design model base level. It also does not let an organisation have more then 2 private applications.

Luckily you can take your zero data with an internet connection and develop as many local service side applications as you want so that Xero does not limit our access to your data without paying lots of third party development fees...nothing SPECIAL HERE!!!!!! oh please.... this is such a simple model its almost brain dead!!!!

[RGR367]

like most businesses...... a large marketing budget is the key to success.

At the end of the day or when this is all over, the sp will be set on the price it wants to settle as dictated by the Market. So it was just another day folks. You buy when you think it's right or sell also when you think it's right. You cannot be both wrong or right in any point in time. But whatever, here's hoping you all make some decent gains/profit.

[Toasty]

Ok, im back...now Xero, sorry Zero... is a nice little IIS product, standard MS stuff, nothing special really.. whats special is robs ability to get funding for bulk standard internet browser IIS developments, the devlopment team understand internet development. it uses a standard rest api, so for example i could allow users all around the world to download and access Xero on there multi tasking windows laptops and there data from anywhere they have an internet connection and play with there xero data and for example play with it in MS Office.!!!

Is that you surfersteve? I still struggle to understand what you are saying here. Do you have a competing technology?

The technology base that Xero runs on may be basic but the appeal I think was in the ability to get people to connect with their financials in a fun and meaningful way. I am not sure that the average customer knows or cares what programming language their numbers are on as long as they get efficiencies from using it.

[mikeybycrikey]

Ok, im back...now Xero, sorry Zero... is a nice little IIS product, standard MS stuff, nothing special really..

I guess if that's what you think, you don't really understand what they're trying to achieve.

You also probably think that Apple just makes a standard touch screen phone. Nothing special there! Google just makes a search engine. Nothing special there! Amazon is just a internet book shop. It's all just standard off technology behind all of them.

You might understand the nuts and bolts of technology but that seems the be where your understanding ends.

[abstractionsInsoftware]

I guess if that's what you think, you don't really understand what they're trying to achieve.

You also probably think that Apple just makes a standard touch screen phone. Nothing special there! Google just makes a search engine. Nothing special there! Amazon is just a internet book shop. It's all just standard off technology behind all of them.

You might understand the nuts and bolts of technology but that seems the be where your understanding ends.

well perhaps you have access to the internal OOP class framework for there accounting?

well i dont see anything special about the accounting model they are using either...

NOTHING SPECIAL ABOUT THE TRANSACTION FORMAT AND I HAVE SPENT THIRTY YEAR IN ACCOUNTING SOFTWARE MODEL R&D

Nuts and Bolts?

my knowledge goes far beyond nuts and bolts.....

[Harvey Specter]

Is that you surfersteve?I was wondering the same thing.

Xero isn't about the best technology, it is about the best User Experience. Add to that an affordable (opex, not capex) price and it is ideal for new and establishing businesses.

[dingoNZ]

well perhaps you have access to the internal OOP class framework for there accounting?

well i dont see anything special about the accounting model they are using either...

NOTHING SPECIAL ABOUT THE TRANSACTION FORMAT AND I HAVE SPENT THIRTY YEAR IN ACCOUNTING SOFTWARE MODEL R&D

Nuts and Bolts?

my knowledge goes far beyond nuts and bolts.....


Well then why do you go and make something superior oh great one?

[abstractionsInsoftware]

Well then why do you go and make something superior oh great one?

what is special about zero is the MONEY!!!! in the BANK and the number of programmers knocking out bulk standard code

its like WW1 on the internet.... Numbers are everything with internet apps

and zero is nothing like google...

and i want zero to succeed... it will allow a lot of R&D to be added to there products and new zealand to grow its IT base from our universities...

i am older now ... the future is for the young graduates..

[Toasty]

Well then why do you go and make something superior oh great one?

If its surfersteve then he usually implies that he is working on some awesomely better technology but can't talk about it for commercial reasons or something like that.

Based on the language though I think we are dealing with a marginally self aware AI from an indian help desk?

[couta1]

There was a group of athletes ( No one special) coached by one Arthur Lydiard(Also no one special at the time) They lived on meat and potatoes(Nothing special) and trained hard using this Lydiard system, a little old NZ training system against the rest of the world, well the rest as you know is history and now every training system for athletes on the planet incorporates the Nothing Special Lydiard system to a greater or lesser extent so does something have to be Special to succeed?

[abstractionsInsoftware]

If its surfersteve then he usually implies that he is working on some awesomely better technology but can't talk about it for commercial reasons or something like that.

Based on the language though I think we are dealing with a marginally self aware AI from an indian help desk?

stop it toasty

get back to work, surely you have some trust accounting to do.. :)


i have been allowed back, and its only to remind you all to be careful.. rob is a very good story teller..........be careful here

so next time a product comes out with a lot of money behind it be careful my friend

i am not working on accounting as you know it and is nothing like zero

some of it has been put in other products overseas in vertical markets

[Harvey Specter]

If its surfersteve then he usually implies that he is working on some awesomely better technology but can't talk about it for commercial reasons or something like that.

Based on the language though I think we are dealing with a marginally self aware AI from an indian help desk?I actually thought SurferSteve may have got his talking computer to automatically post his messages for him since the computers AI is slightly more coherent that him.

[klid]

I don't think the profit/accelerating rate of losses is the most important metric for Xero, I think it is the growth rate of customers in the US, which has some relation but not all too much, as they're quite clear on the fact that they do not care about this metric (profit/loss) at the moment. Not at least until they get 1m customers. If they were focusing on that now, then this metric would be rather different; but would the share price be? I don't believe so.

[Toasty]

stop it toasty

get back to work

i have been allowed back but probably not for long

so next time a product comes out with a lot of money behind it be careful my friend

i am not working on accounting as you know it and it is R&D

some of it has been put in other products overseas in vertical markets

but you wont see it in side zero because zero does not have a model that allows it yet and zero's business model does not allowing promote cross server proxy objects to be set up for advanced business development yet from there standard API

however they have the money and the people so they could change there model

I can't work out whether you support XRO or want it to fail or some strange middle scenario.

And please...its Xero and "their". Not sure why you insist on calling it zero unless its some sort of unsubtle dig?

[abstractionsInsoftware]

[QUOTE=couta1;511544]There was a group of athletes ( No one special) coached by one Arthur Lydiard(Also no one special at the time) They lived on meat and potatoes(Nothing special) and trained hard using this Lydiard system, a little old NZ training system against the rest of the world, well the rest as you know is history and now every training system for athletes on the planet incorporates the Nothing Special Lydiard system to a greater or lesser extent so does something have to be Special to succeed?[/QUOTE


yes i agree with you and that is what i have said

i and my friends trained under him ....

[abstractionsInsoftware]

I can't work out whether you support XRO or want it to fail or some strange middle scenario.

And please...its Xero and "their". Not sure why you insist on calling it zero unless its some sort of unsubtle dig?

ok from now on ill call it

0 or X or Z

[Casino]

I don't think the profit/accelerating rate of losses is the most important metric for Xero,


I think it is the growth rate of customers in the US, ... but not all too much,


... they do not care about this metric (profit/loss) at the moment.



I think you hit the nail on its head. It's a matter of faith with the NZX as a place of worship. Arguing over Xero is as meaningful as debating religion/existence of god. You either believe or you don't.

[boofters]

Hey Abstractions,
I gotta ask what "does not have a internet model for its applications that let you merge your services at the application design model base level"
actually means?

I have had 20 years in finance IT across the SDLC and this sounds like some of the best bulls%it bingo I have ever heard.

rgds

[Beagle]

Actually it is not new at all. It is simply an old idea given a new name. SaaS companies used to be called ASPs - Application Service Providers. They have been around since the late 90's and the concept was an evolution of the dot.com model. I attended the last big industry Conference in Orlando, FL in May 2000, and the bulk of the exhibitors and attendees were at ASPCon rather than ISPCon. It was all the rage back then. In fact, it was my job to evaluate ASPs in terms of whether or not to become a channel partner for them. I have done this in both New Zealand, and Australia. So I am well acquainted with the whole model.

Today the SaaS business model is just as unproven as it was back in 2000. Those original ASPs ended up folding due to never making a profit, and ultimately running out of cash (due to the clanging shut of investors wallets due to the market crash. Oh wait, that won't happen again will it?). The only thing that changed is that there is a new bunch of investors and media people who were not around in 2000, who had never heard of ASPs, and thus think that SaaS is something brand new (well, I guess that's why the industry renamed it. Similar to how global warming is now called climate change).

Now having picked apart many commercial ASP/SaaS financials, I can tell you profitability comes down to the split between fixed and variable costs. If the vast proportion of costs are fixed, then the Saas model would work, as there ultimately would be a breakeven point where the customer revenues cover the costs. However, if the bulk of costs are variable (sales, commissions, and support are the biggies) then the only thing that happens is that the more customers the company acquires, the more money they lose. There is no breakeven point (but if you own the company who cares? You got stock and are worth millions. So long as you stick to the story you should be able to milk the market for years and retire comfortably).

This is why the important metric for XRO is not customer numbers or revenues. It is the accelerating rate of losses. If Saas was to work, more customers should see shrinking losses. So this suggests that XROs cost base is a variable one, not a fixed one. And until they reign in their costs (which they have no intention of doing) there will be no breakeven, and no profits.

And then there is churn. After acquisition, churn is the second most important thing to a SaaS company. XRO faces two risks - one is that their customer base is inherently unstable, 4 out of 5 small businesses fold within 2 years. Secondly, don't underestimate the intelligence of the customer. For those small businesses who make it, they may end up evaluating the Total Cost of Ownership of accounting software, and decide that for the long term they are better of buying the software outright (ie. desktop) and capitalising it, rather than paying a monthly fee forever and expensing it. If I ran a small business, this would certainly be one of the things I would be considering. Consequently, I would expect XRO to have a high churn rate (which makes it different to enterprise SaaS companies whose customers are more sticky). In this instance Intuit and MYOB would have a competitive advantage, as they can loss lead customers on to their online platform, and then shift them to desktop when it suits the customer to move.

You combine a high churn rate with customers leaving before you have reached the point where you are making a profit on them, with the high variable costs of acquiring them in the first place, and you have a recipe for escalating losses, and a company where the only shareholders who win are those who founded the company or bought in early. The rest are just grist for the mill.

Lastly, a bit of context. Last financial year, Intuit spent $1.2 BILLION dollars on sales and marketing alone (or 29% of revenue). Research and Development was $685 MILLION. How does XRO plan to compete with that?

Its nice that a little ole NZ company is pluckily trying to stick it to the giants, but I wouldnt be betting my retirement on their success. In the business world, he who has the most cash wins (the Microsoft and Facebook models). Get back to me when XRO is cash flow positive and profitable.

Brilliant post. Last time I looked there were over 200 different accounting programs out there. What makes XRO so special, NOTHING.

Why didn't I think of this for my practice, the bigger it gets the more money it loses and I float that idea on the market and make millions. What a brilliant way for certain executives to make money.
How the market hasn't woken up to the many flaws in the system I'll never know, OH WAIT, it is starting too.

With over 50 states in the U.S.A. all with different sales taxes and quirks in their systems it could be quite a bugger writing programs to make all that work smoothly and lets not forget one salient thing, regulators are changing taxation legislation on an extremely frequent basis so all those people out there thinking one day XRO can stop paying all those bright programmer's $250K+ better think again.

Variable costs will see to it that it is unlikely this company will ever be profitable to such an extent that values the stock where it is, I couldn't agree more.

Put me down as another one that people can get back to me when its trading on a realistic multiple of EPS, not losses or sales.

[bull....]

People i have spoken to say xero is better to use than the others out there in the same category, but it lacks all the features of some of the others, so to be better than the opposition they need to do everything the others do and more, sadly they are not in that category yet so thats why i believe they struggle in the us

[tzbang]

What real values do you guys place on the SP if the US was taken out of the equation. Lets say Rod gives up on the US, or it's the 'US-blue-sky' is removed out of the value. I've seen anything from $3 - $15 thrown around

[abstractionsInsoftware]

Hey Abstractions,
I gotta ask what "does not have a internet model for its applications that let you merge your services at the application design model base level"
actually means?

I have had 20 years in finance IT across the SDLC and this sounds like some of the best bulls%it bingo I have ever heard.

rgds


your right actually

a some words constructed to cover a multitude of technologies that allow your objects to merge themselves with the base framework

using either a proxy server interface for your classes using registered callbacks for your injected interfaces to the app framework or any one of a number of technologies using meta data or even runtime dll loading

now if they have used DOT NET for the base oop classes which MS may or may not hate as they have opened sourced it

one option for xero is to use the OOP framework that allows runtime loading of the assemblies so your stuff gets loaded when your private version of the APPS run

as you know they only allow 2 private apps

now that has been around for since an early version of dot net

i use some russian code to load assemblies on windows written in c++ and assemble, lovely stuff and i just specify the interface to load and the russian assemble code does the rest..

no i dont understand the assemble code i just use it


now you will excuse me i have to get my old body off for some hill repeats on the bike, lets it for me, good luck, im being removed i hope ...

[Banksie]

your right actually

a some words constructed to cover a multitude of technologies that allow your objects to merge themselves with the base framework

using either a proxy server interface for your classes using registered callbacks for your injected interfaces to the app framework or any one of a number of technologies using meta data or even runtime dll loading

now if they have used DOT NET which MS may or may not hate as they have opened sourced it

xero may have used the OOP framework that allows runtime loading of the assemblies so your stuff gets loaded when your private version of the APPS run

as you know they only allow 2 private apps

Hahaha surfersteve, you're back.

[RGR367]

your right actually

a some words constructed to cover a multitude of technologies that allow your objects to merge themselves with the base framework

using either a proxy server interface for your classes using registered callbacks for your injected interfaces to the app framework or any one of a number of technologies using meta data or even runtime dll loading

now if they have used DOT NET which MS may or may not hate as they have opened sourced it

xero may have used the OOP framework that allows runtime loading of the assemblies so your stuff gets loaded when your private version of the APPS run

as you know they only allow 2 private apps

You really now confused me on how to understand the business that is Xero :( But what I can tell you is, they use .Net too as one of their programming languages.

[abstractionsInsoftware]

You really now confused me on how to understand the business that is Xero :( But what I can tell you is, they use .Net too as one of their programming languages.

of course they do, read the developmetn docs, they use IIS

ok check out the xero dev center web site and download VS and have a go, anyone can be a xero developer, you can have 2 private apps!!

well i hope one day we might allow people to have as many private local apps as they wish but they will have to site off line as xero wont allow you to just develop your own stuff for your data on there site...

bike time, sorry got to go

[dingoNZ]

of course they do, read the developmetn docs, they use IIS

ok check out the xero dev center web site and download VS and have a go, anyone can be a xero developer, you can have 2 private apps!!

well i hope one day we might allow people to have as many private local apps as they wish but they will have to site off line as xero wont allow you to just develop your own stuff for your data on there site...

bike time, sorry got to go


Sorry mate but your grammar is awful, it takes ANY credibility out of your argument.

Now please stop trolling.

[RGR367]

.............anyone can be a xero developer, you can have 2 private apps!!...

bike time, sorry got to go

........ anyone can be a Xero developer? Of course anyone can be a "developer" but not necessarily be a Xero one. Lol. Yeah, better bike my friend as the more you talk the more ignoramus you become.

[abstractionsInsoftware]

........ anyone can be a Xero developer? Of course anyone can be a "developer" but not necessarily be a Xero one. Lol. Yeah, better bike my friend as the more you talk the more ignoramus you become.


come to think of it where is that easy to use accounting computer scripting language they are building using "roslyn" that would allow apps to be developed and loaded at runtime by the assembly loaders..

that is in the R&D department right? due out anytime soon no doubt

yes you have go through the partner process, so that you havnt developed an app that could open up the API beyond there control ... naughty nuaghty

[Fisherboy3]

Unpleasant people with Asperger's syndrome

[mp52]

I HAVE SPENT THIRTY YEAR IN ACCOUNTING SOFTWARE MODEL R&D
Possibly with lacklustre results? As noted, your techno rant bares little relevance to the strategic ability of the company to capture sales. Open Source zealot who doesn't play well with others perchance?

[mp52]

Actually it is not new at all. It is simply an old idea given a new name....
Excellent post and summary. The real disruptor in this market will be the commodification, or even disappearance of the accountancy profession via the combination of cheap labour markets, automation and AI as can be seen in other white collar professions (e.g. the natural language algos currently replacing lawyers for contract settlement of uncontested divorces, property titles and the like).

[Goldstein]

Hmm. Just tuned into this thread to get an idea of what people think of the plunging share price and also get an idea of what people think will happen when some of the initial investors are able to sell their shares.

There's 5 minutes of my life I'm not getting back.

[Hawkeye]

Hmm. Just tuned into this thread to get an idea of what people think of the plunging share price and also get an idea of what people think will happen when some of the initial investors are able to sell their shares.

There's 5 minutes of my life I'm not getting back.

haha I agree there is alot of not much being said here at the moment.
I'm hopeful they will not bail out crazy fast, but high profile investors can be very unpredictable.

[Carpenterjoe]

Crazy to think this company is growing by roughly 476 clients a day, is that right?

How the hell do they organises that sort of carnage.

[Toasty]

Crazy to think this company is growing by roughly 476 clients a day, is that right?

How the hell do they organises that sort of carnage.

Can't remember the number but the bulk of these would be set up by the accountants and there are 13,000 so far? Its actually quite an easy process for the most part. I imagine Xero just has to make sure they have the server space available.

[Harvey Specter]

Crazy to think this company is growing by roughly 476 clients a day, is that right?

How the hell do they organises that sort of carnage.They dont have to do anything! - it is done all online and they just have to ensure they pay the bill to Rackspace who host the server. Very cheap and very scalable.

The tough/expensive part is ensuring there is a constant flow of companies that hit the sign-up page. The network of accountants is very important for this - there is no better recommendation for accounting software than from your accountant.

[skid]

Someone is selling down to 1750
Could be worse?

[Fisherboy3]

They dont have to do anything! - it is done all online and they just have to ensure they pay the bill to Rackspace who host the server. Very cheap and very scalable.

The tough/expensive part is ensuring there is a constant flow of companies that hit the sign-up page. The network of accountants is very important for this - there is no better recommendation for accounting software than from your accountant.

And the US partner sign up rate is very strong which is being overlooked for some reason I haven't seen any discussion/comment in the media or here despite that being a big part of xeros strategy win advisors first then train encourage and give them a cut.

[jamiec26]

The lack of business acumen displayed by some people on this thread gives me a headache. Trying to figure out which ones are trolls and which actually have no idea.

Is it too early for a stiff drink?

:t_up: I find it all quite entertaining!

[Goldstein]

Hmm. Just tuned into this thread to get an idea of what people think of the plunging share price and also get an idea of what people think will happen when some of the initial investors are able to sell their shares.

There's 5 minutes of my life I'm not getting back.

Looks like you can reply to yourself. Great. There is not too much going on in this article either.

http://www.stuff.co.nz/business/industries/10624824/Xero-shares-tipped-to-hold-up-once-cap-goes

Nice work Goldstein.

[Hawkeye]

Looks like you can reply to yourself. Great. There is not too much going on in this article either.

http://www.stuff.co.nz/business/industries/10624824/Xero-shares-tipped-to-hold-up-once-cap-goes

Nice work Goldstein.

Haha way to give yourself a pat on the back, what are your thoughts on xero goldstein? feel free to pm me if your not keen on sharing with everyone

[Goldstein]

Haha way to give yourself a pat on the back, what are your thoughts on xero goldstein? feel free to pm me if your not keen on sharing with everyone

I don't know to be honest Hawkeye. It's a shame that the escrow period is not ending under better conditions. I note that Rod Drury is still bullish on the US. Could be an interesting few days/weeks ahead.

[couta1]

Hey NG thanks for your post the other day and I'm putting my hand up to being one having very little business acumen when it comes to Xero just a stubborn belief that they can achieve what they set out to do plus I was told I would never achieve certain things in life which I did against substantial odds so I'm behind Rod all the way.

[Hawkeye]

I don't know to be honest Hawkeye. It's a shame that the escrow period is not ending under better conditions. I note that Rod Drury is still bullish on the US. Could be an interesting few days/weeks ahead.

Agreed, I also think the next figure update will be key to see if getting rid Karpas and getting someone new in was a brilliant move, or not

[Hawkeye]

Hey NG thanks for your post the other day and I'm putting my hand up to being one having very little business acumen when it comes to Xero just a stubborn belief that they can achieve what they set out to do plus I was told I would never achieve certain things in life which I did against substantial odds so I'm behind Rod all the way.

"likes this post"

[Toasty]

Just watching the pre close wrestling match. Fascinating.

[skid]

Hey NG thanks for your post the other day and I'm putting my hand up to being one having very little business acumen when it comes to Xero just a stubborn belief that they can achieve what they set out to do plus I was told I would never achieve certain things in life which I did against substantial odds so I'm behind Rod all the way.

''Behind Rod all the way''--I knew you liked him couts,..but really..........................Just kidding --a little humor in an otherwise bleak day:D

Also ..Well done to you both ..Goldstein:)

[Ginger_steps_]

I don't know to be honest Hawkeye. It's a shame that the escrow period is not ending under better conditions. I note that Rod Drury is still bullish on the US. Could be an interesting few days/weeks ahead.

Perhaps the end of the escrow period couldn't have come at a better time? I mean if the SP was in the high 30's still then we may have seen a decent sell off in anticipation of current events unfolding further - maybe we would be sitting on $12 now instead? In our current situation Thiel has to really assess whether he still believes the story - and if he does that is a huge vote of confidence IMO. If not, and he sells - he breaks even (roughly) - which is still a likely scenario i guess.
Im personally waiting to see the bottom and load up as I see the US coming into fruition over the next two years, while the serious uptake occurs in AUS and ENG. On the current customer trend (again roughly - my style!) we can expect 1 million customers in 2016 (FY2017), or earlier if the US gains some momentum which it may well do as the product matures to include each states tax models.

I personally havent used Xero but have a couple of friends who do - I asked one (she's a resteraunt owner) to show me how it all worked. I was very impressed with the ease of the system (press: ok ok ok ok ok ok - done!), but i was impressed even more so with the enthusiasm and passion she had towards Xero's product when talking about it. I have since met others here in Aussie who use it and they all say the same thing - how their lives (and business') have become so much more enjoyable with the removal of stress from their daily business/accounting practices. My point here is that Xero have stated the adoption curve is still in its infancy, being mostly early adopters at this point. So add in word of mouth/organic growth of these passionate users (which i don't seem to see from intuit users) along with the current growth curve and we could see the perfect storm starting to take shape with plenty of blue sky on the other end. Just like Rod said - tuck these shares away in the bottom draw for 5 years. I had actually been hoping for a decent correction/top up opportunity - and here it is! Well almost.

Kick ass Xero - I believe in you!

On another note - does anyone know if Xero are still offering free migration from intuit in the US? I thought that was a pretty sharp weapon (considering no other company had managed that previously).

[Beagle]

Hey NG thanks for your post the other day and I'm putting my hand up to being one having very little business acumen when it comes to Xero just a stubborn belief that they can achieve what they set out to do plus I was told I would never achieve certain things in life which I did against substantial odds so I'm behind Rod all the way.

Mate I tried my best to give you a reality check when I was down your way at the SUM ASM on 30 April when they were $31.
What I learned a long time ago in my profession is you can lead a horse to water but you can't make it drink so there's no point losing sleep when it doesn't.
I feel sad for you and others that are sitting on ever increasing and in some cases really massive losses in the mistaken belief that this guy is a messiah of all solutions to accounting software and given enough time you'll eradicate those losses and make massive profits instead. Its just software mate, one of many different types out there. There's nothing magical about it, the code contained therein doesn't eradicate cancer or Ebola.
Biggest load of BS hype I can ever recall in my 30 years plus investing on the NZX.

[Snow Leopard]

...in the mistaken belief that this guy is a messiah of all solutions to accounting software...


http://www.youtube.com/watch?v=plZRe1kPWZw

Best Wishes
Paper Tiger

[BFG]

Hahaha magic. So the thread has finally evolved to the point of Monty Python clips! :D

[mikeybycrikey]

Biggest load of BS hype I can ever recall in my 30 years plus investing on the NZX.

While it may never again be worth $45, I think that saying that it is "the biggest load of BS" you've seen in 30 years is over egging it slightly. This is a company that has 371,000 customers. It has been growing at 80% for several years. They have more income from outside NZ than inside NZ.

Sure the $11 million per month in revenue and non-existent profit need work but there is definitely something more than BS going on at Xero.

Remember 1987? Remember Equiticorp? There was a lot of BS and a lot of hype there.

Remember TranzRail? Remember the BNZ collapse? Remember the Air NZ fiasco with Ansett? Remember Feltex? Similar story.

The Xero bubble of 2014 might have got a fair way ahead of itself, but there does seem to be a real business under all the hype, there doesn't seem to be anything illegal going on and the product seems to be pretty decent.

I've been saying all along that Xero is very hard to value. It all depends on how many users they can attract in the next few years. Will the 80% growth stop this year, or in 5 years. That makes a huge difference.

$45 was pricing in more than 4 years of 80% growth. Current price is still factoring in about 2½ years of growth. They've still got a big job to do to justify the current SP but they are getting closer by the day.

Hype is pretty important for growing a business at this scale. It's a bit of free marketing for them. But there is actually a real product behind the hype.

[Harvey Specter]

If I had to guess, I'd put their odds of success in the states - generously - at (say) 1 in 5.How do you define success?

An interesting fact I saw the other day - Intuit may have 80% market share but 80% of SME dont use accounting software. I assume they either use pen, excel or their accountant. That is why Xero has targeted accountants and H&R Block ( the company that does tax returns for 80% of American companies).

NOte: As with all statistics, they may or may not be made up.

[Goldstein]

Its just software mate, one of many different types out there. There's nothing magical about it, the code contained therein doesn't eradicate cancer or Ebola.
Biggest load of BS hype I can ever recall in my 30 years plus investing on the NZX.

Roger, you could say almost exactly the same thing about Apple's iPhone.

[Beagle]

MickeybycrickeyYeah I remember all that crap, fair comment that there's nothing illegal going on. Time will tell but there's not even the slightest hint that losses are slowing as the company grows.
The way the guy has won business awards before the company even turns a single cent positive EPS to me is somewhat disingenuous.
Aren't awards normally handed out to business's that actually make money and have proven they are successful...just a thought.

Goldstein - How so ? Apple are a hugely successful highly profitable strongly growing company trading on a very realistic PE multiple of real earnings.

[Goldstein]

Goldstein - How so ? Apple are a hugely successful highly profitable strongly growing company trading on a very realistic PE multiple of real earnings.

I was referring to your quote "Its just software mate, one of many different types out there. There's nothing magical about it, the code contained therein doesn't eradicate cancer or Ebola. Biggest load of BS hype I can ever recall in my 30 years plus investing on the NZX."

Likewise, the iPhone is just a smart phone, one of many different types out there. There's nothing magical about it, the code contained therein doesn't eradicate cancer or Ebola...

Apple have made an appealing product. Question is, have Xero? From what I've heard they have, and that's what Thiel and co were betting on.

Disc: Not a Xero holder

[Beagle]

You can. And thats why Apple is getting its ass kicked. Just because something is pretty, or first to market, doesnt mean it will ultimately win that market.

"The fact that Samsung stands atop the global smartphone heap isn’t new information, but the sheer volume of smartphones the Korean company has shipped so far this year is staggering. With the Galaxy S5 just beginning to ship, Samsung’s total shipment volume for the first quarter of the year came to 85 million smartphone units, more than the next four competitors — Apple AAPL -1.25%, Huawei, Lenovo and LG — combined."
http://www.forbes.com/sites/ericmack/2014/04/30/samsung-is-undisputed-king-of-smartphones-apple-still-distant-second/

Yeah the fact that Samsung is kicking arse is old news but I took Goldsteins comment to infer that Apple is a load of BS hype like XRO.
I should have brought some a few years ago at $200 but my broker at the time talked me out of it, that's Forsyth Barr for you. ($100 bucks now after the seven for 1 share split)

PS Okay I see what you're getting at Goldstein.

[Casino]

MickeybycrickeyYeah I remember all that crap, fair comment that there's nothing illegal going on. Time will tell but there's not even the slightest hint that losses are slowing as the company grows.
The way the guy has won business awards before the company even turns a single cent positive EPS to me is somewhat disingenuous.
Aren't awards normally handed out to business's that actually make money and have proven they are successful...just a thought.



In all fairness, Xero has achieved a lot with a lot less compared to competitors. They have also forced Intuit, MYOB, etc to rethink and develop an open API, which has created business opportunities for others like Vend. They deserve recognition for that. An award isn't being beyond reproach though.

[Beagle]

They could get an award for cash burn, opps, sorry, that's naughty but I couldn't resist :D

[Casino]

They could get an award for cash burn, opps, sorry, that's naughty but I couldn't resist :D

:)

What are they supposed to do with the money? Pay a dividend? Spending makes sense but you can't have it both ways. It was always justified with the need to grab market share quickly but now it's about winning a marathon. I'm surprised that they didn't use some of the funds for a small acquisition.

[andysh]

:)

What are they supposed to do with the money? Pay a dividend? Spending makes sense but you can't have it both ways. It was always justified with the need to grab market share quickly but now it's about winning a marathon. I'm surprised that they didn't use some of the funds for a small acquisition.

They have acquired Paycycle, Spotlight Workpapers and Workflowmax. http://en.wikipedia.org/wiki/Xero_(software)#Acquisitions (http://en.wikipedia.org/wiki/Xero_(software)#Acquisitions)

[Casino]

They have acquired Paycycle, Spotlight Workpapers and Workflowmax. http://en.wikipedia.org/wiki/Xero_(software)#Acquisitions (http://en.wikipedia.org/wiki/Xero_(software)#Acquisitions)

And how many since getting $180m? Intuit bought 14 companies in the last 18 month.


Ugh. Workflow max is a dog. Horrible software. Almost the antithesis of xero. Strange acquisition, to say the least.

I think it's been completely overlooked how genius and important the WFM acquisition was.

[BFG]

Going by some of the comments on here and NBR regarding the Xero implosion this is the kind of world we will be living in soon:

"In the world I see - you are stalking elk through the damp canyon forests around the ruins of Rockefeller Center. You'll wear leather clothes that will last you the rest of your life. You'll climb the wrist-thick kudzu vines that wrap the Sears Tower. And when you look down, you'll see tiny figures pounding corn, laying strips of venison on the empty car pool lane of some abandoned superhighway."

Luckily, Tyler Durden slept in this week.

Take it easy everyone, the world isn't ending (yet)

[nextbigthing]

Lucky we don't have red cards anymore, I suspect there would be a few flying at the moment...

[Fisherboy3]

Ugh. Workflow max is a dog. Horrible software. Almost the antithesis of xero. Strange acquisition, to say the least.

Works well as as practice management software links with xero, links to IRD and efiles gst and tax returns. All good I like it and it's free as opposed to myob accountants office which costs $9000 for the same

[Hawkeye]

Totally disagree. I used it for a few months and went straight back to harvest. So much more intutive and better aligned with the look, feel and ethos of xero.

OK.... so they lost you to harvest..... how many did they gain in NZ in that year again? Probably not a bad trade

[Ginger_steps_]

It is widely accepted that the software really is beautiful to use. I use it for both my trust and my business. It truly is a fantastic product. However, that doesn't make it a multi-billion dollar business as its currently valued. There is simply too much deeply-entrenched competition in key markets, whose products will rapidly evolve to catch up - and perhaps even surpass - xero over the longer term.

If I had to guess, I'd put their odds of success in the states - generously - at (say) 1 in 5.

I appreciate your opinion NG. I understand the difficulty in valuing saas but may I ask what you value Xero at? What do you see the fair value SP as presently?

I also believe that incumbents software are rapidly catching up and yes it is a worry, however as has been mentioned before, the world is still waking up to saas and many businesses dont use accounting software at all - I believe cloud accounting (with all of its future implications) will pull many new users into accounting software, and when the hoards come - Xero will be ready to soak up the goodness. 1% is all they need to be huuuuuge. One thing i do wonder however is why attack Intuit in the US so early, when they could have entered many countries in europe instead, with much more simple tax systems... I do see a bit of ego from Rod with this david and goliath type behaviour. Anyway I dont know F-all, im sure they have discussed this in detail and had their reasons - so Im just happy sitting back and taking a punt.

[arc]

When their newly recruited american representative walked out of his position after only a few months saying xro would not make it in the USA as it didn't understand the local competition and how rapidly they have reacted/adapted... things have gone pear shaped.
Its a complex mix of having a company with a high burn rate but no real substance, its product is intangible and they can loose favour very quickly. If it doesn't achieve dominance it will eventually end up being sidelined.

Just look at the failure of microsoft based cell phones.. Apple and Android have the market wrapped up.

[Hawkeye]

When their newly recruited american representative walked out of his position after only a few months saying xro would not make it in the USA as it didn't understand the local competition and how rapidly they have reacted/adapted... things have gone pear shaped.

I didn't read the article that said that, please post

[Goldstein]

I didn't read the article that said that, please post

Yes, I's be interested too. I remember at the time I thought the announcement was odd. I did a little digging but came up short.

[dingoNZ]

NFLX shares down 19% on the day. Was down over 25% in pre-market trading, so gained a little ground through the day.

Market expectation was +3.7 million new subscribers in Q3
Actual result was +3.0 million new subscribers

NFLX attributing slower growth to having raised prices by US$1 per month in may (from US$7.99/month to US$8.99/month)
“slightly higher prices result in slightly less growth”
So an interesting insight into price elasticity for TV programs






Concern potentially for XRO?

[Beagle]

As per my earlier post, I would be happy to invest - as a pure punt - under $10. However, $5 looks closer to fair value IMHO.
Wts funny that you say that NG. Forest and I had a good chat about XRO back on 30 April when we were flying down to the SUM ASM. We both thought the value is somewhere around $5-6 based on gut instinct but didn't mention it on here at that time as it was $31 back then. Honestly it might be a good product but as losses grow with turnover I can't see the point where it gets to break even so how low will it go is frankly anyone's guess. I guess people either have faith or they don't. I don't.

[blackcap]

Wts funny that you say that NG. Forest and I had a good chat about XRO back on 30 April when we were flying down to the SUM ASM. We both thought the value is somewhere around $5-6 based on gut instinct but didn't mention it on here at that time as it was $31 back then. Honestly it might be a good product but as losses grow with turnover I can't see the point where it gets to break even so how low will it go is frankly anyone's guess. I guess people either have faith or they don't.

If they do not ever make a profit or break even..., regardless of the turnover and customer numbers... well they will be worth $0.

(based on an investor purchasing an investment for a series of future positive cashflows. If those cashflows will never eventuate then the investment is worth nothing)

[winner69]

When then CEO says we need to "reassesses its US growth plans" when the sales guy departs isn't that corporate speak for we seemed to have stuffed up because didn't understand the local competition and how rapidly they have reacted/adapted...and things have gone pear shaped like arc has said

Listen carefully .... the things that are not said are the important things

Like arc I don't think I specifically read the unsaid things in any one particular media piece etc but I am sure that is what it means

[winner69]

Wts funny that you say that NG. Forest and I had a good chat about XRO back on 30 April when we were flying down to the SUM ASM. We both thought the value is somewhere around $5-6 based on gut instinct but didn't mention it on here at that time as it was $31 back then. Honestly it might be a good product but as losses grow with turnover I can't see the point where it gets to break even so how low will it go is frankly anyone's guess. I guess people either have faith or they don't. I don't.

Clare Capital has a valuation about this amount under one of their growth scenarios

You remember Baycorp Roger -- reaching stupid valuations but luckily some foolish Australians came and bought them out so NZ shareholders managed to capture the value ..... somebody taking Xero out at a ridiculous price seems the best outcome now .... isn't that how the greater fool theory works

[arc]

Sorry folks but I cant post it as it was not a web article, it was a discussion {second hand}.
I personally hope they can make a comeback and give the other players a run for their money... no pun intended.

[Beagle]

If they do not ever make a profit or break even..., regardless of the turnover and customer numbers... well they will be worth $0.

(based on an investor purchasing an investment for a series of future positive cashflows. If those cashflows will never eventuate then the investment is worth nothing)

Accountants and sharebrokers definitely agree on that one mate.
What I find perhaps even more amazing than how the SP ran away with itself is how influential people in the business world are treating a said individual like royalty and showering him with business awards LONG BEFORE he's even proven his business model actually works. Every time there's an announcement that customers and losses have grown contemporaneously I shake my head and wonder where this all ends... I would have thought it rudimentary that if we are ever to get to a break even losses must start diminishing if customers numbers keep growing.
Did they put Phar Lap on a pedestal before he even won a single race at the trials...

[RGR367]

............... Did they put Phar Lap on a pedestal before he even won a single race at the trials...

the other side could be said too that there are those who were rediculed too at first and achieved greatness afterwards. And Roger, Phar Lap was not that kind that can talk up a position with journos and/or admirers :)

[RGR367]

I'm not worried about customer acquisition right now but the numbers of employees just keep on getting higher and higher. Hopefully those are sale folks because if they were mostly on IT, do we really need that number to really develop this so called ecosystem. They're don't really need to rewrite the whole of internet, do they?

discl: son works for Xero

[Beagle]

the other side could be said too that there are those who were rediculed too at first and achieved greatness afterwards. And Roger, Phar Lap was not that kind that can talk up a position with journos and/or admirers :) Most racehorses seem full of hot air after a race :D

[Goldstein]

Sorry folks but I cant post it as it was not a web article, it was a discussion {second hand}.
I personally hope they can make a comeback and give the other players a run for their money... no pun intended.

Understood Arc. A valuable comment of yours nevertheless.

[forest]

not quite the whole of the internet, but they will have to continually program it for ever to keep abreast of changes in federal tax laws, state tax laws, county tax laws, accounting standards, international reporting standards, domestic reporting standards, customer preferences etc etc etc.

Your right NewGuy, XRO will always be programming each state is different and changes are going on permanently, I wonder how much liability risk they have if they ever find that a great number of tax returns are incorrectly calculated.

In comparison I perceive DIL to be a far simpler program without the constant need to update to stand still. And DIL makes a profit.

[blackcap]

I'm not worried about customer acquisition right now but the numbers of employees just keep on getting higher and higher.

discl: son works for Xero

That is my concern too. Another 500 staff is all good in theory but it means another $50m annually off the bottom line....

[winner69]

I'm not worried about customer acquisition right now but the numbers of employees just keep on getting higher and higher. Hopefully those are sale folks because if they were mostly on IT, do we really need that number to really develop this so called ecosystem. They're don't really need to rewrite the whole of internet, do they?

discl: son works for Xero

Rod said - "We would love to hire as many of those (500) as possible in New Zealand because there is a cost advantage, especially for development staff," he said.

Sounds like a few /lots of the 500 are developers

[winner69]

Somebody posted a few months ago a break down of the staff numbers into sales & marketing / development / customer support

Anybody know the split now - like what do a 1000 people do

[Goldstein]

Rod said - "We would love to hire as many of those (500) as possible in New Zealand because there is a cost advantage, especially for development staff," he said.

Sounds like a few /lots of the 500 are developers

The product has to work and work well. If not it's game over.

[winner69]

We just need to remind ourselves of the Xero business model

Red Dot about where we are now (maybe should be to the left a bit now) on the blue line of course. No point in following the other 2 lines, they are for losers

So deeper and deeper losses still to come but the deeper they are the bigger the prize at the end of the journey

All is going to plan - no need to panic

Graphic - Xero presentation, red dot mine

[couta1]

For a company whose CEO must be one of the most lauded in recent history, it sure knows how to LOSE money.
You mean USE money NG:cool:

[Goldstein]

More importantly. It has to CONSTANTLY evolve.

Constant evolution = massive resource requirements = limited profitability.

That's true. However, I would hope that the Xero developers have built a software platform that can be configured easily by a non-developer before release. If every tax change required a coding change they would be in trouble, but surely it must have been designed with this in mind.

[BFG]

The real test here will be if Xero needs another caputal injection. It's done great over the past 5 years bull run. But how will it perform if funds are needed in a bear market? I don't think Thiel & co would let themselves be diluted down or reduce their stake. Interesting times ahead...

[Beagle]

More importantly. It has to CONSTANTLY evolve.

Constant evolution = massive resource requirements = limited profitability.

You're on to it. Tax law is constantly evolving. Anyone who thinks one day they can suddenly make most of their expensive programmers redundant is dreaming.

[tim23]

They keep saying the fall has been on light volume, hardly - often several hundred thousand daily, hardly light given its still one of the higher priced stocks on the market?

[Goldstein]

I wouldn't be so sure, Goldstein. Changes in tax laws are very hard to predict, let alone accommodate ex ante in code.

This is the sort of detail I'm short on with this stock. If as you say NG, it is essentially an ongoing development effort, then I wonder what sort of market share they would need to make the company profitable and sustainable going forward.

They've got a very good product, but it isn't a disruptive technology - there are alternatives out there.

I've just noticed something interesting. If you look at Intuit's share price from April to September it rose about 18% while XRO fell by 29% over the same period. The relative difference in performance is rather large. I can't quite understand why Inuit's share price did so well during the year with XRO entering the market. What am I missing?

[mayday]

so now .com wasn't kidding
6370

[nextbigthing]

so now .com wasn't kidding
6370

Are you allowed to buy stock whilst in jail?

[mayday]

full version
http://www.nbr.co.nz/opinion/dotcom-claims-credit-xero-shares-dropping-ck

[couta1]

You may be missing the fact that xero's recent SP action reflected a global overcooking of the market and was completely out of step with its underlying fundamental "value."

To put it slightly differently: $45 was bat**** insane. $17 is also ridiculous. Like. absurd. $5 looks like a worthy opportunity. So Thiel&co are that dumb and unsavvy that they would poor millions into a company and buy shares at $18 when they are only worth $5??? Thiels net worth increased from 1.2 billion in 2012 to 2.2 billion in 2014 so like I said he must be pretty unsavvy aye, Hmmmm

[Santiago]

So Thiel&co are that dumb and unsavvy that they would poor millions into a company and buy shares at $18 when they are only worth $5??? Thiels net worth increased from 1.2 billion in 2012 to 2.2 billion in 2014 so like I said he must be pretty unsavvy aye, Hmmmm

It's a good point. I'm assuming he, and the others, did some pretty hefty due diligence. And I reckon they're in for the long term (I wouldn't be too worried about those guys dumping shares over the next few months). And given they have skin in the game, I reckon people like Theil will be using their connections to push this thing along in the US especially.

Comments like the $5 one above, and the share price action over the past 12 months I think show that in NZ we have no idea how to value this sort of company. It has definitely been overvalued ($45) and I would say $5 is somewhat undervalued. I'm wondering if it has been oversold based on global fears and very reasonable concerns about the U.S. strategy. If you can get out of our quite small NZ mindset, a global SaaS company growing at 80% a year and that has executed largely to plan valued at US$2b could even be regarded as cheap (bearing in mind growth and potential far outweigh dividends and profit in terms of the market valuing this sort of business). Depends if you see the doubt as a risk or a buying opportunity... I'd still wait, personally, though looking at the volumes the last few days there is plenty of money piling in (it'd be great to see how much of that is from offshore- my guess, and I may be wrong, is that right now NZers are selling out of fear, and the shares are being snapped up by overseas interests).

[Corporate]

Basic question, in the XRO presentation what does ACMR stand for?

[winner69]

Basic question, in the XRO presentation what does ACMR stand for?

Annualised Committed Monthly Revenue

Like what those signed up now will pay over the next 12 months

$130 odd million is pretty good eh

[Harvey Specter]

So Thiel&co are that dumb and unsavvy that they would poor millions into a company and buy shares at $18 when they are only worth $5??? Thiels net worth increased from 1.2 billion in 2012 to 2.2 billion in 2014 so like I said he must be pretty unsavvy aye, Hmmmmwhats really interesting with this is XRO is listed. Very unusual for Theil to still be investing once listed, let alone 3 times. Would love to ask him about it.

[couta1]

I never said that nor implied it, but nice try. I guess you have to start clutching at something when the wheels are falling off so rapidly. :cool:

But yes, in retrospect, I think that theil et al will be starting to really wonder whether this thing is actually going to work. We have new information now about lack of success in the states, which they didn't have at the time.
Not clutching at anything NG, i believe Thiel&co are in it for the long haul and are not that fickle to believe Xero would have cracked the states after a year, given there standing they will know what it means to ride out the tough times and will understand the culture in the States far better than any of us. If i didnt believe the story i would have sold out a while back or could any day i wanted to, its not as if im not used to taking a loss after my big CNU one and a few smaller ones as well along the way, only time will tell with this story:cool:

[Goldstein]

It's a good point. I'm assuming he, and the others, did some pretty hefty due diligence. And I reckon they're in for the long term (I wouldn't be too worried about those guys dumping shares over the next few months). And given they have skin in the game, I reckon people like Theil will be using their connections to push this thing along in the US especially.

Comments like the $5 one above, and the share price action over the past 12 months I think show that in NZ we have no idea how to value this sort of company. It has definitely been overvalued ($45) and I would say $5 is somewhat undervalued. I'm wondering if it has been oversold based on global fears and very reasonable concerns about the U.S. strategy. If you can get out of our quite small NZ mindset, a global SaaS company growing at 80% a year and that has executed largely to plan valued at US$2b could even be regarded as cheap (bearing in mind growth and potential far outweigh dividends and profit in terms of the market valuing this sort of business). Depends if you see the doubt as a risk or a buying opportunity... I'd still wait, personally, though looking at the volumes the last few days there is plenty of money piling in (it'd be great to see how much of that is from offshore- my guess, and I may be wrong, is that right now NZers are selling out of fear, and the shares are being snapped up by overseas interests).

What I'm suggesting with Inuit's SP is that the US market hasn't seen XRO as a serious threat this year. Depending on your view you might see XRO as a bargain at the moment.

It'll be interesting to see if the price stabilises around $18.

[Santiago]

Just wondering if anybody else on this thread watches dragon's den? Its one of my favourite TV shows. Provides very practical insights to how business risks and opportunities should be assessed.

The one thing that lets down most prospective companies on that shows is the absence of (i) IP protection, and (ii) barriers to entry. Xero faces both problems in spades. First, its code can be easily copied. Second, it cannot stop others entering the market. In fact, the situation is far worse. The market is already awash with other - much bigger - competitors.

I just can't understand why some of you can't see this or accept it??

Have you heard of "brand". They have a good one.

They're also the biggest and fastest growing at what they do (SaaS) in three of their four target markets, so I would say that their competitors have bigger barriers of entry than Xero, particularly because their brand is so strong.

I just can't understand why 80% a year growth isn't enough for you. Go ahead and do not buy the shares, stick to utilities or whatever it is you prefer, but give them some credit for growing from nothing to 371000 customers at a fast clip. Oops, that's probably 400000 now.

[Santiago]

Interview with Rod

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11344259

Makes him sound like a nutter. Must be under stress...

[Casino]

You may be missing the fact that xero's recent SP action reflected a global overcooking of the market and was completely out of step with its underlying fundamental "value."

To put it slightly differently: $45 was bat**** insane. $17 is also ridiculous. Like. absurd. $5 looks like a worthy opportunity.

Cash per share is $1.35. $3.65 gives you an EV of $465 million. That's a revenue multiple of 3.6. Don't you think there is a happy middle between P/S ratios of 30 and 3 for a fast-growing company?

[Goldstein]

Just wondering if anybody else on this thread watches dragon's den? Its one of my favourite TV shows. Provides very practical insights to how business risks and opportunities should be assessed.

The one thing that lets down most prospective companies on that shows is the absence of (i) IP protection, and (ii) barriers to entry. Xero faces both problems in spades. First, its code can be easily copied. Second, it cannot stop others entering the market. In fact, the situation is far worse. The market is already awash with other - much bigger - competitors.

I just can't understand why some of you can't see this or accept it??

As far as IP goes, I'm not sure the code could be lifted. Regardless, they are simply doing what has been done before but in a modern way, using modern technology (data in the cloud available to many devices, etc)

As far as barriers to entry, Xero is trying to be best in breed. It has been written from the ground up with modern software engineering techniques. This should enable it to be flexible and easily modified/upgraded/tailored going forward. The other providers out there most likely have legacy code issues.

To my mind there isn't too much wrong with the product. It's the market penetration in the US that is the only concern to me.

[Casino]

As far as IP goes, I'm not sure the code could be lifted. Regardless, they are simply doing what has been done before but in a modern way, using modern technology (data in the cloud available to many devices, etc)

As far as barriers to entry, Xero is trying to be best in breed. It has been written from the ground up with modern software engineering techniques. This should enable it to be flexible and easily modified/upgraded/tailored going forward. The other providers out there most likely have legacy code issues.

To my mind there isn't too much wrong with the product. It's the market penetration in the US that is the only concern to me.

QuickBooks Online Vs. Myth #1: QuickBooks Online Uses “Legacy Code” (Busted!)

The belief that the current version of QuickBooks Online employs so-called legacy code, potentially a decade or more old owes much to a Forbes article from January of 2014. In that article, Gene Marks writes:
“Many current QuickBooks customers (perhaps you?) who are frustrated with the software’s older architecture but have suffered with it because they/you did not feel the need (or were just too lazy) to change will now be forced to change in the next few years.”
The weasel words here are “older architecture.” The truth is QuickBooks Online was redesigned in July of 2013, addressing the need for scalability and real-time data in modern, cloud-based accounting applications. The redesign that occurred in mid-2013 was from-the-ground-up – meaning no old code, no legacy cruft. Literally: none.
http://www.business2community.com/brandviews/getapp/quickbooks-online-vs-internet-rumor-mill-01007437

[Goldstein]

QuickBooks Online Vs. Myth #1: QuickBooks Online Uses “Legacy Code” (Busted!)

The belief that the current version of QuickBooks Online employs so-called legacy code, potentially a decade or more old owes much to a Forbes article from January of 2014. In that article, Gene Marks writes:
“Many current QuickBooks customers (perhaps you?) who are frustrated with the software’s older architecture but have suffered with it because they/you did not feel the need (or were just too lazy) to change will now be forced to change in the next few years.”
The weasel words here are “older architecture.” The truth is QuickBooks Online was redesigned in July of 2013, addressing the need for scalability and real-time data in modern, cloud-based accounting applications. The redesign that occurred in mid-2013 was from-the-ground-up – meaning no old code, no legacy cruft. Literally: none.
http://www.business2community.com/brandviews/getapp/quickbooks-online-vs-internet-rumor-mill-01007437

I said most likely. And they did, leading to a redesign in 2013.

[Santiago]

Did you just say that?

Barriers to ENTRY do not apply to incumbents. They have already ENTERED the market.

p.s xero's brand is practially non-existent in the biggest target market. Not so for its competitors.

Come on- you started it- I didn't think I had to be so explicit. Future competitors. Guys sitting around wondering whether to take them on. I wouldn't back another company in, say, Australia to start from scratch and win. Just as you say in your post: "prospective companies".

Their brand is not non-existent: Forbes named them the most innovative company. They're more than doubled customers in the last year. They just started in the US- you're being a bit unrealistic if you think they're going to overtake Intuit in their first year. Do you back them to grow their brand in the US? You, obviously not. Me- yes, given their success in other markets. Timeframe- same as Oz and UK- 4 or 5 years to lift off. Would be great if it were sooner.

[Santiago]

Ummm, they already have. Myob and Sage (in the SaaS space, which is where the industry is heading). Why? Because, as you say, the product is amazing.

[Casino]

I said most likely. And they did, leading to a redesign in 2013.

Yes but it's frustrating to read something unsubstantiated over and over again. Over 5000 posts in this thread alone, so much hype/media attention and we still get the most basic facts wrong.
The other one is that Xero was the first in the cloud. QBO was! The old QBO was very clunky and unpopular helping Xero's rise. Xero had second-mover advantage, which they must protect now. Intuit is very open about copying Xero:


“We followed the leaders of the product companies that we admired. Each one of us followed a CEO and watched how they made their decisions, how they engaged their teams, how much times they spent in products, and we changed the way we lead inside the company,” Smith said during Intuit’s annual investor briefing in late September. “The fruits of that labor showed up this year.”
http://fortune.com/2014/10/07/intuit-plan-cloud/


I wish Xero had more money from day 1. They could be a lot further down the track with a much better product. Unfortunately most investors are only driven by greed instead of vision.

[Goldstein]

Yes but it's frustrating to read something unsubstantiated over and over again. Over 5000 posts in this thread alone, so much hype/media attention and we still get the most basic facts wrong.
The other one is that Xero was the first in the cloud. QBO was! The old QBO was very clunky and unpopular helping Xero's rise. Xero had second-mover advantage, which they must protect now. Intuit is very open about copying Xero:


“We followed the leaders of the product companies that we admired. Each one of us followed a CEO and watched how they made their decisions, how they engaged their teams, how much times they spent in products, and we changed the way we lead inside the company,” Smith said during Intuit’s annual investor briefing in late September. “The fruits of that labor showed up this year.”
http://fortune.com/2014/10/07/intuit-plan-cloud/


I wish Xero had more money from day 1. They could be a lot further down the track with a much better product. Unfortunately most investors are only driven by greed instead of vision.

I never said Xero was the first in the cloud. I never said any of the competitors actually have legacy code (although some most likely will).

My point is, that Xero is a modern bit of software, so they don't have these issues.

[Santiago]

Their market share in the US is less than 0.1%. She's a bloody long road from there. And the costs of achieving decent market share will completely undermine profitability. Indeed, they will have to spend tens - if not hundreds - of millions to achieve their US goals.

I just think some of you guys are pretty naive about how fiercely the US incumbents will react to the threat posed by xero.

Totally agree- and I wouldn't have bought at $45 (though I sort of wish I sold a few more in the 30s when I did offload a bit). It'll be a huge effort to get there in the US. I love competition- it makes all sort of wonderful things happen. As a shareholder, I'm comfortable with them foregoing profitability to take a shot at the U.S. Makes life interesting.

[Casino]

I never said Xero was the first in the cloud. I never said any of the competitors actually have legacy code (although some most likely will).

My point is, that Xero is a modern bit of software, so they don't have these issues.

I'm not sure how modern Xero is but they started on a clean slate. It has certainly helped them come a long way. But there are other ingredients to their success. Empowering accountants, empowering third-party developers, empowering businesses and clever low-cost marketing just to name a few.

[Santiago]

I'm not sure how modern Xero is but they started on a clean slate. It has certainly helped them come a long way. But there are other ingredients to their success. Empowering accountants, empowering third-party developers, empowering businesses and clever low-cost marketing just to name a few.

Makes you wonder what might be next. The CEO has dropped hints that when they finally round-out the accounting product they're going to turn to "banking 2.0", and I believe we're starting to see that in NZ with direct links from businesses to retailers (line Z energy). Where that might go, and how they monetize it, is something I really have no idea about, but I'm sure they've got a plan.

In in the meantime, I really want them to finish building the product. My biggest concern is that they will hit the mark in the US on brand and likeability, but miss on the product front with a few gaps they've been carrying for far too long, quite frankly (quotations being one, payroll rolled out across all States etc). Over-promising and under-delivering in any market is a bad idea, but really bad in the States.

[winner69]

Their market share in the US is less than 0.1%. She's a bloody long road from there. And the costs of achieving decent market share will completely undermine profitability. Indeed, they will have to spend tens - if not hundreds - of millions to achieve their US goals.

I just think some of you guys are pretty naive about how fiercely the US incumbents will react to the threat posed by xero.

Didn't that guy (no not NewGuy) on the radio the other morning say that Xero would need to raise at least 1/2 billion (USD) to succeed in the US ... and then went on to say (I think) that needs an Nasdaq IPO ..... but falling shareprice wouldn't help that cause

Was dozing but I think that what he said - probably an Intuit plant anyway

[Casino]

Makes you wonder what might be next. The CEO has dropped hints that when they finally round-out the accounting product they're going to turn to "banking 2.0", and I believe we're starting to see that in NZ with direct links from businesses to retailers (line Z energy). Where that might go, and how they monetize it, is something I really have no idea about, but I'm sure they've got a plan.

In in the meantime, I really want them to finish building the product. My biggest concern is that they will hit the mark in the US on brand and likeability, but miss on the product front with a few gaps they've been carrying for far too long, quite frankly (quotations being one, payroll rolled out across all States etc). Over-promising and under-delivering in any market is a bad idea, but really bad in the States.

The omissions could have been avoided if they had more manpower at the start. Ironically the people who made the most mistakes will be their most valuable assets now. This makes me wonder whether they have been secretly working on Xero 2.0 with all the developers they keep hiring.
I'm not sold on banking 2.0. They have the leverage here but I don't see UK/US banks coming on board. In fact, it may spook them and decide to fight Xero while they're still small and they can put a lid on them. Time will tell. I see one giant ace that Xero has up its sleeve. They could offer the starter pack or some entry level of Xero tailored to micro-businesses for free in the US. It's radical but you know what they say about desperate times...

[Goldstein]

The omissions could have been avoided if they had more manpower at the start. Ironically the people who made the most mistakes will be their most valuable assets now. This makes me wonder whether they have been secretly working on Xero 2.0 with all the developers they keep hiring.
I'm not sold on banking 2.0. They have the leverage here but I don't see UK/US banks coming on board. In fact, it may spook them and decide to fight Xero while they're still small and they can put a lid on them. Time will tell. I see one giant ace that Xero has up its sleeve. They could offer the starter pack or some entry level of Xero tailored to micro-businesses for free in the US. It's radical but you know what they say about desperate times...

Yes, I like that idea. Just go after market saturation.

I recall a number of years back when Centos were essentially producing a free version of Red Hat Linux. Initially Red Hat didn't like it, but then they embraced it because the number of users in the community sky-rocketed. A certain proportion of these decided they wanted the support Red Hat offered and decided to get the full licensed product from red Hat.

It would be a hoot if XRO decided to make their software open source. That would seriously shake up the market.

[winner69]

Rod posted this link on his Twitter account a little while ago

The comments after the article are interesting

http://m.accountingweb.co.uk/article/uk-now-one-xeros-biggest-markets/565946

[Casino]

Yes, I like that idea. Just go after market saturation.

I recall a number of years back when Centos were essentially producing a free version of Red Hat Linux. Initially Red Hat didn't like it, but then they embraced it because the number of users in the community sky-rocketed. A certain proportion of these decided they wanted the support Red Hat offered and decided to get the full licensed product from red Hat.

It would be a hoot if XRO decided to make their software open source. That would seriously shake up the market.

It's not without risk and they don't have to play that card now. But it's in essence what Intuit is already doing in Australia. The practice manager is completely free and QBO $5 per month. I feel there is a hint of anti-competitive behaviour here. Apart from that, I'm not sure if the market opportunity is as big as people think it is. Of course we will see millions of businesses in the cloud but probably not at today's margins. Maybe you need to put it out there just as a threat before it ends up as an all out internecine war.

[winner69]

Employee #1,000 on board

http://www.computerworld.co.nz/article/557395/eight-years-drury-welcomes-xero-1000/?fp=16&fpid=1

[Corporate]

Annualised Committed Monthly Revenue

Like what those signed up now will pay over the next 12 months

$130 odd million is pretty good eh

Indeed, thanks winner.

[winner69]

Wow - an excited Rod on the radio this morning

Even NewGuy will be rushing out to buy heaps .... maybe not heaps but at least a few

http://www.radiolive.co.nz/Rod-Drury-CEO-Xero/tabid/506/articleID/57612/Default.aspx

[Santiago]

Wow - an excited Rod on the radio this morning

Even NewGuy will be rushing out to buy heaps .... maybe not heaps but at least a few

http://www.radiolive.co.nz/Rod-Drury-CEO-Xero/tabid/506/articleID/57612/Default.aspx

Thanks for posting. Great interview. He seems a little weary of having to deal with NZ small-mindedness. I'd have to say, based on the numbers, I feel for him. What have they done wrong? Their growth rate is amazing. It's goning to be fascinating watching this play out over the next few years.

[Ginger_steps_]

I think we get you point NG.

[abstractionsInsoftware]

quoted"meaning no old code, no legacy code Literally: none."

OOPclass based code can run both locally and on a server and on thecloud - the cloud merely being a group of servers and VM'savailable across a network open to multiple connections across theinternet. There are also privates clouds and private virtualnetworks.

Clearlystructured OOP code can run across the internet and locally on adesktop or a laptop

youcan also take so called OLD code created in modules and place it in aseries of structures that allow it to function as if it were aseparate service allowing it to be reused everywhere at any time andto scale.

Theredesign for the GUI is the part of the software that has beenchanged and the in some cases if the GUI code and business code arenot separated and connected by a middle layer the whole design mayhave to be cut apart and reconnected or worse case replaced..


Thatis a code base can supply business rules for both type of userexperience. A native GUI experience and a browser HTML Javascript GUIif the classes are placed in special stacked modular designs. Theactual structures used are often intellectual property and in somecases not available for publication. .

[Baa_Baa]

Another confounding week for the bulls as XRO gapped open lower on Monday and found merciful support just under $16.75, then back-tested $18 and failed, found support at $16.75 again and closed the week at a miserable $17.05.

The big story all week was whether the 2013 Oct big buyers would fold some or all of their ex-escrow holdings. But nothing happened to suggest that one way or the other. In the background Rod gets plenty of media airtime and once again tells his shareholders to keep calm, everythings going great and it will all be just fine.

With a bounce in the NAS/DOW last Friday US time providing some modicum of direction, XRO will likely rally Monday looking to retest $18 possibly $19 during the week, esp if the US tech markets follow though with some upside. Alternatively there is little price support on the chart below here until $15.

Some will sense a growing anticipation of the opportunity to be buying this sustained price weakness. However there's nothing in the chart that would suggest this price is the bottom.

[Casino]

quoted"meaning no old code, no legacy code Literally: none."

OOPclass based code can run both locally and on a server and on thecloud - the cloud merely being a group of servers and VM'savailable across a network open to multiple connections across theinternet. There are also privates clouds and private virtualnetworks.

Clearlystructured OOP code can run across the internet and locally on adesktop or a laptop

youcan also take so called OLD code created in modules and place it in aseries of structures that allow it to function as if it were aseparate service allowing it to be reused everywhere at any time andto scale.

Theredesign for the GUI is the part of the software that has beenchanged and the in some cases if the GUI code and business code arenot separated and connected by a middle layer the whole design mayhave to be cut apart and reconnected or worse case replaced..


Thatis a code base can supply business rules for both type of userexperience. A native GUI experience and a browser HTML Javascript GUIif the classes are placed in special stacked modular designs. Theactual structures used are often intellectual property and in somecases not available for publication. .

You could be right if you look at the benchmark bleeding-edge schemas. There are different ways to synthesize customized convergence. Think of push clicks and mortar bandwidth vis-a-vis mesh bleeding edge metrics. I see the trend going towards syndicate utility targets, which will of course impact invigorate partnered channels. Perhaps one could consider coalesce best of breed processes as an alternative. If you configure end-to-end deliverables pair valid infomediaries or implement customized content you will minimize intuitive competencies. Of course there are those who disagree and brand global vortals with innovate out-of-the-box process flows in mind.

[nextbigthing]

You could be right if you look at the benchmark bleeding-edge schemas. There are different ways to synthesize customized convergence. Think of push clicks and mortar bandwidth vis-a-vis mesh bleeding edge metrics. I see the trend going towards syndicate utility targets, which will of course impact invigorate partnered channels. Perhaps one could consider coalesce best of breed processes as an alternative. If you configure end-to-end deliverables pair valid infomediaries or implement customized content you will minimize intuitive competencies. Of course there are those who disagree and brand global vortals with innovate out-of-the-box process flows in mind.

Haha brilliant work surfer steve

[Goldstein]

Another confounding week for the bulls as XRO gapped open lower on Monday and found merciful support just under $16.75, then back-tested $18 and failed, found support at $16.75 again and closed the week at a miserable $17.05.

The big story all week was whether the 2013 Oct big buyers would fold some or all of their ex-escrow holdings. But nothing happened to suggest that one way or the other. In the background Rod gets plenty of media airtime and once again tells his shareholders to keep calm, everythings going great and it will all be just fine.

With a bounce in the NAS/DOW last Friday US time providing some modicum of direction, XRO will likely rally Monday looking to retest $18 possibly $19 during the week, esp if the US tech markets follow though with some upside. Alternatively there is little price support on the chart below here until $15.

Some will sense a growing anticipation of the opportunity to be buying this sustained price weakness. However there's nothing in the chart that would suggest this price is the bottom.

That's a pretty good synopsis BB. I'm in the group with a growing sense of anticipation - just can't push the buy button yet with that chart. I expect to see the price close above $18 over the next few days, but not prepared to play Texas Hold 'em

[skid]

Another confounding week for the bulls as XRO gapped open lower on Monday and found merciful support just under $16.75, then back-tested $18 and failed, found support at $16.75 again and closed the week at a miserable $17.05.

The big story all week was whether the 2013 Oct big buyers would fold some or all of their ex-escrow holdings. But nothing happened to suggest that one way or the other. In the background Rod gets plenty of media airtime and once again tells his shareholders to keep calm, everythings going great and it will all be just fine.

With a bounce in the NAS/DOW last Friday US time providing some modicum of direction, XRO will likely rally Monday looking to retest $18 possibly $19 during the week, esp if the US tech markets follow though with some upside. Alternatively there is little price support on the chart below here until $15.

Some will sense a growing anticipation of the opportunity to be buying this sustained price weakness. However there's nothing in the chart that would suggest this price is the bottom.

I think the first step would be the American markets actually stabilizing (its a relief, but one up day is not enough to confirm this) Gotta eliminate the ''dead cat'' before proceeding on.
If we get to the point where a murmur from the Fed is not enough,then watch out.(remember Yellens previous comments sent the markets to a record gain--only to crash to a record drop(for the year) the next day)

[Schrodinger]

haha, not a chance.

Rod is deluded. That is becoming clearer by the day.

Best of luck to all holders. You may need it~! :D

Thanks for the thoughtful analysis. I would back Rod over you anyday.

Looking to enter if it gets near $12.

[skid]

Thanks for the thoughtful analysis. I would back Rod over you anyday.

Looking to enter if it gets near $12.

I can understand your comments ,but ofcourse the real question is whether you back Rod over his competitors not a poster.

Disc.-not saying one way or the other

[Schrodinger]

I do back Rod over the competition but as I have said before about many NZ companies, you don't jus turn up in the USA and expect the cash to roll in (PEB). That's very arrogant and the USA is a whole different level of competition.

The USA is a decade long story for Rod and they need to be in for the long haul. They will need to be creative about customer acquisition and it would be interesting to know the metrics around this as I am interested in what the motivations are for switching etc. Will look into it more if I become a holder.

[blackcap]

With a bounce in the NAS/DOW last Friday US time providing some modicum of direction, XRO will likely rally Monday looking to retest $18 possibly $19 during the week, esp if the US tech markets follow though with some upside. Alternatively there is little price support on the chart below here until $15.

.

I thought it would rally as well today with the huge gains on the DOW/Nasdaq and local markets. I wonder if it is a worry that this has not happened?

[Ginger_steps_]

Fair call. I'm happy to be running a highly profitable - albeit small - business. I sincerely hope Rod can say the same about xero one day. Why don't you give Rod a call and offer him some advice? Im sure he is very envious of you.

[Goldstein]

I thought it would rally as well today with the huge gains on the DOW/Nasdaq and local markets. I wonder if it is a worry that this has not happened?

That's not a large turnover (so far) today by XRO's standards. Looks like a nervous drift. Perhaps the market waiting to see if any SSH notices come through over the next month or two.

[Ginger_steps_]

I don't think he can afford me tbh :cool: I wasn't talking about bedroom "advice" :p

[skid]

Well guys what do you reckon? Is there any one (besides Couts) who can manage a positive spin on this?

[Beagle]

I thought it would rally as well today with the huge gains on the DOW/Nasdaq and local markets. I wonder if it is a worry that this has not happened?

Shareholders would do well to ponder that point very carefully IMO. If XRO can't go up after the Dow and local market are having very strong days...

[robbo24]

I don't think he can afford me tbh :cool:

Come on guys, leave Roddo alone :D:D:D:D:D:D:D

[RTM]

Fair call. I'm happy to be running a highly profitable - albeit small - business. I sincerely hope Rod can say the same about xero one day.

Although hopefully Rod is not adding... - albeit small -....

[Harvey Specter]

Well guys what do you reckon? Is there any one (besides Couts) who can manage a positive spin on this?I think todays price is reasonable - less than 20x annualised revenues and growing at 80%, yet still not taken off in the biggest market. They are customizing the product for that market and even a small market share is a big number. They aren't technically taken on the incumbent, they are looking to expand the market by capturing those not currently using anything. Increasing costs are a concern as i the risk they dont get a foot hold in the US.

I wouldn't bet against market sentiment at the moment so I definitely are not buying. When sentiment finally does turn, I will look at it again, especially if it goes lower than is currently is.

[Toasty]

I think todays price is reasonable - less than 20x annualised revenues and growing at 80%, yet still not taken off in the biggest market. They are customizing the product for that market and even a small market share is a big number. They aren't technically taken on the incumbent, they are looking to expand the market by capturing those not currently using anything. Increasing costs are a concern as i the risk they dont get a foot hold in the US.

I wouldn't bet against market sentiment at the moment so I definitely are not buying. When sentiment finally does turn, I will look at it again, especially if it goes lower than is currently is.

And getting more reasonable by the minute.......:(

[axe]

Will we see sub $16 by EOD?

[whatsup]

Looks like it , Q is the near term bottom under $10.00, looks likely !!

[Beagle]

After eight long years of losses that seem to keep growing and growing I am curious as to when the "faithful" believe XRO will actually achieve break even ? Another 8 years ?
PS Stock getting absolutely hammered today on a very buoyant day ???

[whatsup]

After eight long years of losses that seem to keep growing and growing I am curious as to when the "faithful" believe XRO will actually achieve break even ? Another 8 years ?

Hard to say !

[Fox]

After substantial growth, whatever that means to Rod. Even then the costs incurred along the way are going to be quite large to cover with (any) profits. Any software company in the long-term run is under large pressure from competitors and the changing market. It's anyones guess what the future holds for Xero I guess.

[Ryrynz]

Anyone else losing their wits end with this stock? Bloody knew I should've bailed at $25..fml.

[Goldstein]

been a 6 month nervous drift.... so far.
Not sure if a fall from $45 to $16 can be classified as a nervous drift.........more like a collapse in share price.
Similar to what DIL and PEB did....... will over shoot and bounce but what level it does this is anybodies guess...... I will say over shoot down to $14 then bounce back to 17 to 19.

I meant today's movement Snap.

Even so 6% is more than a drift.

I think Rod Drury said he was off to New York to talk to some of the cornerstone investors over the next two weeks.

He's currently in the position of having to explain why they are down 12% after a year.

[Beagle]

What a day and what a performance considering closing performance from the Dow and Nasdaq on Friday, the performance of the local bourse today and especially considering those American futures looked strong as the day here unfolded.
Drury not worried about the SP. He's made his millions already and has more than enough and there's the fat salary and excellent perks to enjoy so all is well...they have plenty of cash, that seems to be all that concerns him.

Milestones of the number of customers or numbers of employees are far more important that the milestone of actually being EPS positive right ??????

Just watch the technicals and don't buy until the SP intersects with the 100 day MA going back up in a new uptrend, (if this ever happens). 100 day MA is about $24.50 at present so no rush to buy that's for sure.

For much of 2012 they built a base of around $5, maybe in due course they'll test long term support around that level again until they can prove they can actually earn profits ?

[BFG]

Nice big red candle ending on lows with the bots scooping up anything slightly above $16.05. Not a good sign as brokers probably had a flurry of sells from clients over the past week to break up and sell to get best market price. Getting well and truly into oversold territory now.

Ry, I suggest if this stock is impacting adversely upon your life in any way you sell and hold cash until the market turns itself around. Wait for the inevitable bounce and get a better price than $16 (it will happen imho before any leg downwards starts again)

[couta1]

Anyone else losing their wits end with this stock? Bloody knew I should've bailed at $25..fml.
Very testing alright but I'll stick with the ship until the end where ever that ends up .

[Goldstein]

Ry - With all due respect to our canadian friend, please be very careful about making decisions on the back of unsolicited advice dispensed by strangers over the internet. We've all witnessed others lose a lot of money on here like that before, so please DO YOUR OWN RESEARCH AND MAKE YOUR OWN DECISIONS. Do not be swayed by posters that imply some sort of sixth-sense. it is complete bollocks. None of us have any idea what the price will be tomororw, let alone next week or next year.

Seriously.

Yes, I agree with that.

There's people for and against XRO at these prices. But today's movement has surprised more than a few of us I think.

[BFG]

Ry - With all due respect to our canadian friend, please be very careful about making decisions on the back of unsolicited advice dispensed by strangers over the internet. We've all witnessed others lose a lot of money on here like that before, so please DO YOUR OWN RESEARCH AND MAKE YOUR OWN DECISIONS. Do not be swayed by posters that imply some sort of sixth-sense. it is complete bollocks. None of us have any idea what the price will be tomororw, let alone next week or next year.

Seriously.

Just speaking out of experience with the likes of other stocks. Xero WILL bounce at some point, and if Ry is wanting to exit then that will be his best chance as the trend is firmly in the downward position long term and still overvalued for the current markets sentiment.

If it isn't affecting his life then by all means hold. Couta will testify to that. But if you are constantly moody, or watching the market is affecting your work then I suggest selling. It's not worth it and there's always money to be made elsewhere.

I don't pretend to know what the SP is going to do tomorrow, but I can take a VERY educated guess out of experience and history.

I'll shut up and go back to my forest hideaway now.

Good luck Ry.

[Bobdn]

It's actually possible just to stay right away from share market updates, if you really want to. I did it for Chorus to preserve my sanity. I was always going to hold onto the shares and hope for the best (although I should have sold when Couta did :). I stopped looking at the price early December 2013 when it was $1.44 and never checked the price again for three months. I'm really glad I didn't because by mid December the price was down to $1.29 I think which would have totally destroyed my Christmas. I never checked in again until February when the price was still around $1.44 - but I avoided a heap of pain in the meantime.

One thing I did was to stay away from this forum. There just seemed to be too many people enjoying the carnage. I guess its understandable but it's hard to stomach nonetheless.

[Beagle]

Very testing alright but I'll stick with the ship until the end where ever that ends up .

If the price keeps tanking at a great rate of knots the company's name could end up looking like an "unfortunate" choice, hopefully not a prophetic one in terms of the SP end game.

[Harvey Specter]

.
Drury not worried about the SP. He's made his millions already and has more than enough and there's the fat salary and excellent perks to enjoy so all is well...they have plenty of cash, that seems to be all that concerns him.


He's only on $300k isn't he, though he did take some off the table at the last capital raise.

Those brokers with sell ratings must be close to putting a hold rating on it. Must be close to target price for some of them?

[Goldstein]

If the price keeps tanking at a great rate of knots the company's name could end up looking like an "unfortunate" choice, hopefully not a prophetic one in terms of the SP end game.

So Roger with your valuations of:

XRO $0
SUM $1.68
AIR $1.56
RYM $6.50

I take it you're pretty much cashed up at the moment?

[couta1]

So, what's the word, Couta? Are you happy with the advice that led to you purchasing this stock? Would you advise others to trade on the advice that BFG is broadcasting?
Moosies initial advise to me to buy on what he considered a strong buy signal at $42.50 was wrong and he has admitted that and he later apologized to me re that advise. Up to that point he had been calling the movements of Xero with uncanny accuracy ( Others on here would remember that period) Even aside from Moosies advise I would have ended up buying Xero at some other price around that figure say $39 as that was the hype mode I was locked into at the time as were many others. Since then i've done a lot of my own research on Xero and have become a believer that they can do what they set out to do ( Plus I have a diehard kinda personality) What BFG is saying is if you can live with the paper loss without it ruining your life in any way and your a believer then hold otherwise sell at an opportune time but I'd say sell as soon as the stress starts getting too much regardless of the time.

[couta1]

It's actually possible just to stay right away from share market updates, if you really want to. I did it for Chorus to preserve my sanity. I was always going to hold onto the shares and hope for the best (although I should have sold when Couta did :). I stopped looking at the price early December 2013 when it was $1.44 and never checked the price again for three months. I'm really glad I didn't because by mid December the price was down to $1.29 I think which would have totally destroyed my Christmas. I never checked in again until February when the price was still around $1.44 - but I avoided a heap of pain in the meantime.

One thing I did was to stay away from this forum. There just seemed to be too many people enjoying the carnage. I guess its understandable but it's hard to stomach nonetheless.
Some good advice in here Bobdn and you showed real guts to stay away from the market and the forum, yourve done a lot better than i have in this regard:cool:

[Casino]

Hit my mental stop loss today but compare XRO to some others,XRO down 5.8%,Wyn down 6.4%,SLI down 7.7%, has anything changed fundermentally with any of these companies ?answer No, has anything changed in the forecast growth rates of any of these companies? answer No, so instead of selling this seems to me a time to baton down the hatches and ride out the storm IMHO

You don't even listen to yourself. Hope your own post from April doesn't invoke too much pain.


Moosies ... had been calling the movements of Xero with uncanny accuracy

Or was he just stating the obvious?



Even aside from Moosies advise I would have ended up buying Xero at some other price around that figure say $39 as that was the hype mode I was locked into at the time as were many others.

I'm glad that you see it that way. There were many cautioning you not to buy but you only took clues from those who encouraged YOUR view. It's good that you acknowledge this because you have a strong tendency towards confirmation bias.



Since then i've done a lot of my own research on Xero

Mind sharing your research?
Have you done your best to eliminate confirmation bias, which caused you your problems in the first place?


and have become a believer

What were you before?


that they can do what they set out to do

What have they set out to do? How many customers/how much revenue/how much profit do you foresee?




( Plus I have a diehard kinda personality)

Is stubbornness a trait that is unique to you or rather common pitfall of many investors?
http://whitetopinvestor.com/attached-stubborn-and-helpless-investor/



What BFG is saying is if you can live with the paper loss without it ruining your life in any way and your a believer then hold

Why?


otherwise sell at an opportune time but I'd say sell as soon as the stress starts getting too much regardless of the time.

That's what a stop-loss is.

[Fisherboy3]

I see the following points as salient

1. Loss making high growth SAAS companies have long term and resilient investor confidence. Many including salesforce,amazon (not saas) and xero went through the GFC and have gone on to have high caps despite long term losses.

2. Valuations are loosely based on price/revenue averaging between 5 and 20 times depending on growth rates/management/size of potential market/expected gross margins/cash reserves.

3. $45 a share was driven by small retail investors. Proof:comparisons of shareholders using the xero annual returns show a big increase in small shareholdings and larger shareholdings decreasing. At 70 times revenue it was gold fever retail investor greed and bound to correct.

4.At the moment I think 15-20X is fair value given xero's attributes. And in 2 years if xero still has 80% growth it will be worth 15 times revenue even with losses. Proof of this can be found in historical share prices of salesforce and similar companies.

5.Xero is the incumbent saas in UK,Aus,NZ and most likely contender for second place in the US.

6.SAAS is the future of accounting software.

7.Xero has executed THEIR plan flawlessly and so will be able to raise capital in the future their high value backers don't give a hoot about sp fluctuations specially that its corrected from ridiculous to reasonable.

8. Banking 2.0 is based on the fact that nz/aus banks still use ms-dos and MYOB it will change it has to and xero is right in with them giving them the next generation solution.

[couta1]

Well I'm signing off from posting on this thread from now, I've just been as honest as I could be with others but I don't want to keep living in the past and have my previous posts used against me, I'm a work in progress and continually learning. I've chosen to keep holding Xero at this time so guilty as charged.

[Casino]

Well I'm signing off from posting on this thread from now, I've just been as honest as I could be with others but I don't want to keep living in the past and have my previous posts used against me, I'm a work in progress and continually learning. I've chosen to keep holding Xero at this time so guilty as charged.


I didn't mean to attack you and I'm surprised you took it as that. It would be a shame to loose you on this thread. I'm just saying that you need to make sure your forward predictions are not based on the same fallacies that let you down. I feel terribly sorry that you and probably many others left a lot of money on the table. This is a problem and it will only go away with more rational decision making.

[Corporate]

All - rather than cluter up the xero thread why don't you take it to private messages.


Getting back to Xero:
Does anyone have any research/sources that contain generally accepted valuation methods for SAAS companies? I have been modelling xero and I can make assumptions for customer and ARPU growth but one thing I am struggling with is what is a reasonable multipleir for the resulting revenue.

Currently by my calculations xero is sitting on 15.5x ACMR

Cheers,
James

[kizame]

All - rather than cluter up the xero thread why don't you take it to private messages.


Getting back to Xero:
Does anyone have any research/sources that contain generally accepted valuation methods for SAAS companies? I have been modelling xero and I can make assumptions for customer and ARPU growth but one thing I am struggling with is what is a reasonable multipleir for the resulting revenue.

Currently by my calculations xero is sitting on 15.5x ACMR

Cheers,
James

Can I make a suggestion and say, forget about trying to value the company and watch what is happening with xro's chart,use some basic TA to make any decisions you need to make about the co. The picture speaks to you.
After all,It's all about the share price right?

[BFG]

All - rather than cluter up the xero thread why don't you take it to private messages.


Getting back to Xero:
Does anyone have any research/sources that contain generally accepted valuation methods for SAAS companies? I have been modelling xero and I can make assumptions for customer and ARPU growth but one thing I am struggling with is what is a reasonable multipleir for the resulting revenue.

Currently by my calculations xero is sitting on 15.5x ACMR

Cheers,
James

Here's a good start point:

http://www.bullandbearwise.com/NASDAQ100RealPE.asp

And overall indices ratios:

http://online.wsj.com/mdc/public/page/2_3021-peyield.html

Wondering how those saying the market is "fairly valued" can say that with a straight face...

[gv1]

Just received an email from Z.......Now you can get a copy of your Z Card invoice data fed into Xero.

Maybe some comfort for holders that Rod is doing something.

[winner69]

All - rather than cluter up the xero thread why don't you take it to private messages.


Getting back to Xero:
Does anyone have any research/sources that contain generally accepted valuation methods for SAAS companies? I have been modelling xero and I can make assumptions for customer and ARPU growth but one thing I am struggling with is what is a reasonable multipleir for the resulting revenue.

Currently by my calculations xero is sitting on 15.5x ACMR

Cheers,
James


http://www.scalevp.com/a-valuation-framework-for-saas-companies


http://kellblog.com/2013/06/05/what-drives-saas-company-valuation-growth/

As you can see, there’s basically no reward for profitability. *In real estate what matters is location, location, location. *In SaaS, it’s growth, growth, and growth.

[Harvey Specter]

7.Xero has executed THEIR plan flawlessly and so will be able to raise capital in the future their high value backers don't give a hoot about sp fluctuations specially that its corrected from ridiculous to reasonable.Good post. This is the only one I disagree with. Their plan in the US has not gone flawlessly but they have been quick to realise this and make necessary changes. They are probably 2 years behind where their original plan was for the US. However, they identified this and increased their push into the UK market (much simpler as doesn't have 50 different state taxes) to compensate. The risk is the 2 year delay in the US has given Intuit time to spot the risk and take action.

[Harvey Specter]

Does anyone have any research/sources that contain generally accepted valuation methods for SAAS companies? I have been modelling xero and I can make assumptions for customer and ARPU growth but one thing I am struggling with is what is a reasonable multipleir for the resulting revenue.

Currently by my calculations xero is sitting on 15.5x ACMR There were alot of articles linked in one thread but it was taken down when Sparky when Nuclear (since he started the thread - very F'n annoying). There is a big range 5-20 depending on stage of growth is reasonable.

Here's a start but it really needs a third dimension with growth rate: http://clarecapital.co.nz/right-evrevenue-multiple/


Can I make a suggestion and say, forget about trying to value the company and watch what is happening with xro's chart,use some basic TA to make any decisions you need to make about the co. The picture speaks to you.
After all,It's all about the share price right?No harm putting a price on it, and then look to TA to find an entry point. The lower it goes compare to your target price, the better bargain it is.

I note the lowest of the broker targets I have seen is Woodwards at $15.20. All the others are above last nights closing.

[skid]

Markets have calmed and tech stocks up(in the US)--If Xro cant bounce today,Id be having a serious think

disc.-Not holding but finding it an interesting share to watch--When I fist looked at it it was $40 and my faith doesnt extent to those heights for any share on the NZX

[bull....]

could hit support 15 today see what happens if when breaks target 11

[False Profit]

..and then there's the buys in at $3.50 cps... Forgive people their dreams...

[tosspot]

I may buy once it goes under a billion mcap, over that no thank you, not worth the risk. see you at $8

[sb9]

Down to $15.00 at the opening already...could be an interesting day for the punters today

[Intel]

Everyone should go back 6 months to when XRO was included in the MSCI World Index. Have a look at the vol traded that day and approx 1 week leading up to it. That is the amount of selling that will come when XRO falls out of the MSCI World as its market cap is no longer large enough to keep it there. If you wanted to buy, I would highly reccomend waiting one month until the MSCI rebalance and pick up stock on that day. It will undoubtdely put short term price pressure on XRO, enabling lower prices.

Can't beat the economics of supply and demand and I'll eagerly be awaiting that day.

The volume when of XRO shares at the last rebalance was 7m shares, a crude proxy for the amount of shares that will need to be sold by index tracking funds etc.

[Beagle]

Seems some of the punters who had shares locked up in Escrow are none too pleased with the lack of meaningful progress in the States. What other conclusion could be drawn for yesterday and today's dramatic SP declines...

Intel - Excellent point - When is D Day for the MSCI rebalance ?

[dingoNZ]

Seems some of the punters who had shares locked up in Escrow are none too pleased with the lack of meaningful progress in the States. What other conclusion could be drawn for yesterday and today's dramatic SP declines...

Intel - Excellent point - When is D Day for the MSCI rebalance ?

MSCI Announces the Next Four Index Reviews Dates
Geneva –August 13, 2014 – MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support
tools worldwide, including indexes, portfolio risk and performance analytics and ESG data and research,
announced today the announcement and effective dates of the four upcoming regular Index Reviews.
These dates are:
 November 2014 Semi-Annual Index Review:
oAnnouncement date: November 6, 2014
oEffective date: November 26, 2014(*)

[Hoop]

Everyone should go back 6 months to when XRO was included in the MSCI World Index. Have a look at the vol traded that day and approx 1 week leading up to it. That is the amount of selling that will come when XRO falls out of the MSCI World as its market cap is no longer large enough to keep it there. If you wanted to buy, I would highly reccomend waiting one month until the MSCI rebalance and pick up stock on that day. It will undoubtdely put short term price pressure on XRO, enabling lower prices.

Can't beat the economics of supply and demand and I'll eagerly be awaiting that day.


The volume when of XRO shares at the last rebalance was 7m shares, a crude proxy for the amount of shares that will need to be sold by index tracking funds etc.

Good point Intel...

Have these index tracking funds got a bit of leeway within their rules to pre-empt selling a stock before it delists from the index?...If so could they be part of this latest price correction activity?

[robbo24]

Everyone should go back 6 months to when XRO was included in the MSCI World Index. Have a look at the vol traded that day and approx 1 week leading up to it. That is the amount of selling that will come when XRO falls out of the MSCI World as its market cap is no longer large enough to keep it there. If you wanted to buy, I would highly reccomend waiting one month until the MSCI rebalance and pick up stock on that day. It will undoubtdely put short term price pressure on XRO, enabling lower prices.

Can't beat the economics of supply and demand and I'll eagerly be awaiting that day.

The volume when of XRO shares at the last rebalance was 7m shares, a crude proxy for the amount of shares that will need to be sold by index tracking funds etc.

When XRO was added to the MSCI index, and more recently when LNG was added to the ASX200/ASX300 I always remind myself of the weird and wonderful world of index inclusions.

XRO's price rises leading up to the inclusion could be attributable to the hyped up idea of economics of supply and demand. It fell flat on its behind afterwards though didn't it, as with LNG.

There are plenty of examples where being kicked off the index ends up in a price increase. I can't say for certain why that is, but it is just something I noted.

Nothing is a sure thing I guess :D:D:D:D:D:D:D

[Beagle]

MSCI Announces the Next Four Index Reviews Dates
Geneva –August 13, 2014 – MSCI Inc. (NYSE: MSCI), a leading provider of investment decision support
tools worldwide, including indexes, portfolio risk and performance analytics and ESG data and research,
announced today the announcement and effective dates of the four upcoming regular Index Reviews.
These dates are:
 November 2014 Semi-Annual Index Review:
oAnnouncement date: November 6, 2014
oEffective date: November 26, 2014(*)

Thanks for that :)

[BFG]

Bounce time.

#hatersgonhate :D

[robbo24]

You and moosie sure do love those blue smilies!

Do not :D:D:D:D

[BFG]

LOL, and then the two of you post them consecutively. Cute. You make a great couple. :cool:

Come to to the darkside NG :D :D :D

[Toasty]

Damn. Should have picked up a few at $15. Looks like the panic is over, its all upside from here, it'll be different this time, we have reached the bottom of the trough, its a turning point....and so on :D:D:D

[Minerbarejet]

How is the synchronised swimming going with XRO and PEB? Who has the best chance of doubling now?:blink:

[BitcoinBen]

Just to get on the bandwagon, waiting for another large drop tomorrow then will consider a buy ;)

[skid]

The TA guys and gals say if S&P doesnt break resistance of 1905-1910 the traders will profit take and run--today ended @1904--It will be interesting to see if this plays out--suppose 2 moro will tell

[skid]

Yea.......Only down 5 points....Happy days are here again.....all up from here ..cant lose...

[Harvey Specter]

Yea.......Only down 5 points....Happy days are here again.....all up from here ..cant lose...Until more instos dump on opening tomorrow.

[Harvey Specter]

6380
They say a picture speaks a thousand words ...

but this forum still requires 10 characters!

[RGR367]

Until more instos dump on opening tomorrow.
And on what my meager funds can get, it will get it from them :)

[skid]

6380
They say a picture speaks a thousand words ...

but this forum still requires 10 characters!

Dont worry --this thread still has plenty of characters:):)

[nextbigthing]

Bumped into future NBT today. Nice chap. He said the shareprice for XRO at close tomorrow was :D:D:D:D

[klid]

Damn. Should have picked up a few at $15. Looks like the panic is over, its all upside from here, it'll be different this time, we have reached the bottom of the trough, its a turning point....and so on :D:D:D

What makes you think it's all upside? They didn't suddenly start cracking the US did they? Perhaps the share price simply dropped a little more than it should have due to some entities suddenly being able to sell some of their shares, and then corrected to what it should have been. That's my guess. I'm certainly not suddenly bullish.


How is the synchronised swimming going with XRO and PEB? Who has the best chance of doubling now?:blink:
I like the 3 month chart, PEB up 32% and XRO down 32%.

[blackcap]

What makes you think it's all upside? They didn't suddenly start cracking the US did they? Perhaps the share price simply dropped a little more than it should have due to some entities suddenly being able to sell some of their shares, and then corrected to what it should have been. That's my guess. I'm certainly not suddenly bullish.


I like the 3 month chart, PEB up 32% and XRO down 32%.

Exactly, it still went down on what was otherwise a bullish day on the NZ market. If I was holding I would be worried. And if looking to buy would wait before this seemingly infinite downtrend was reversed. As a good colleague once said "picking bottoms is dirty business".

[Toasty]

What makes you think it's all upside? They didn't suddenly start cracking the US did they? Perhaps the share price simply dropped a little more than it should have due to some entities suddenly being able to sell some of their shares, and then corrected to what it should have been. That's my guess. I'm certainly not suddenly bullish.



Sorry I may not have turned my sarcastic cliché setting up high enough. It sounded better in my head maybe.

[Schrodinger]

New Zealand and Australian-listed accounting software provider Xero has been working with investment banks as it prepares for an expected $500 million to $1 billion initial public offering in the United States.
It is understood Xero has been working with Morgan Stanley’s global team, which is a specialist in floating online and digital-based businesses, in recent weeks, and has also had talks with rival bank Credit Suisse.
Xero flagged the US listing at its annual general meeting in July, and said it would make sense to list in 2015 when its revenue passed through the all-important $US100 million ($114 million) a year mark.
The $2 billion software company is currently building out its US sales team and is on the lookout for a head of North America following a leadership change in September. A float is understood to be targeted towards the end of the 2015 calendar year.At Xero’s AGM in July, chief executive Rod Drury said the company forecast 80 per cent subscription revenue growth in 2015. (http://www.afr.com/p/technology/xero_to_list_in_us_as_early_as_QR6zBjDBk4URT9j6hqP rRP)He told investors the company was “considering if we can work with bankers and do all of that stuff”. (http://www.afr.com/p/technology/xero_to_list_in_us_as_early_as_QR6zBjDBk4URT9j6hqP rRP)
Xero’s planned listing comes as Bain Capital prepares its Australian and New Zealand accounting software business, MYOB, for sale. (http://www.afr.com/p/technology/xero_to_list_in_us_as_early_as_QR6zBjDBk4URT9j6hqP rRP)
Bain is taking sale pitches from local investment bankers this week, for a deal which could happen in the first half of the 2015 calendar year. (http://www.afr.com/p/technology/xero_to_list_in_us_as_early_as_QR6zBjDBk4URT9j6hqP rRP)
It is understood Bain has asked Deutsche Bank, Morgan Stanley, Macquarie Capital, Citi, Goldman Sachs, UBS and Bank of America Merrill Lynch to pitch.

Getting ready to play with the big boys now. Looking forward to this.

[longy]

"Xero lines up banks for United States listing..." this came from F/review

IMO given what Rod has been saying and he seems to not bother by SP falling... It would be more attractive to investors or new investors where SP is low when they do the IPO in states, I would think.

[Schrodinger]

Part of their marketing strategy to provide more exposure for accountants with a direct interest in the business and free press from CNBC etc which is priceless.

[mikeybycrikey]

"Xero lines up banks for United States listing..." this came from F/review

Considering there i absolutely no new information in the article, this is feeling a little like a pump and dump to me. Someone trying to get a little bit of a SP bounce before exiting.

[Harvey Specter]

"Xero lines up banks for United States listing..." this came from F/review

IMO given what Rod has been saying and he seems to not bother by SP falling... It would be more attractive to investors or new investors where SP is low when they do the IPO in states, I would think.But much more dilution for existing shareholders. Theil wont be happy if it isn't an upround.

[arc]

The Technical/charting side of this one is not attractive to me at the moment. The fundamentals are also proving hard to get a good grasp on. The Saas aspect is making the company a slippery customer to effectively and reliably value.

Im tempted at the present level... but the bump from yesterdays opening followed by an acceleration/rise curve is more indicative of a careful backoff after volume selling... which might indicate there is more selling yet to come.??...or not?

All I can say at the moment is I recommend patience... and lots of it.

[bull....]

bounce from short term oversold

[bull....]

QUICK SNAP SHOT - Intuit 4.99 a mth offer in the aus market may finish soon and they may raise prices to match competitors, 7000 customers signed since jan to cloud increased staff from 5 to 50 in the last yr will release there new product quickbooks online this week with enhanced features. AFR

[longy]

But much more dilution for existing shareholders. Theil wont be happy if it isn't an upround.

Yep... Will be interesting to see how all it going to span out over the next few years. If Rod is right about Xro's future... I think I would rather want to have a smaller percentage of a much bigger pie.

[BFG]

Bounce off $15.00 low now confirmed. That gap above $19 wants to get filled. Watch the 10 day MA as resistance as well.

[Casino]

What do you mean by confirmed? Are you saying that it will never drop below it? Just curious, as that's quite a strong word.

Did you believe in the nativity of BFG or were you waiting for the resurrection of an elk? I think you have your answer.

[BFG]

Look at your charts, nice big hammer with positive follow on day = confirmation of bounce.

[winner69]

Rod says AFR report a load of ****

We have plenty of cash, no need for more

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11346441

[Casino]

LOL, yeah I know its moosie. I just find his use of language can sometimes give the impression of surety/certainty, which is obviously specious. Just curious to know what he means by "confirmed." If he's implying that it won't fall through that level in future, I'd like to know how we can say that for certain (if, indeed, that is what he's implying).

I had just hoped that new Moosie had learned some lessons and would refrain from displaying his myopic understanding and putting dollar signs in people's eyes.

[J R Ewing]

LOL, yeah I know its moosie. I just find his use of language can sometimes give the impression of surety/certainty, which is obviously specious. Just curious to know what he means by "confirmed." If he's implying that it won't fall through that level in future, I'd like to know how we can say that for certain (if, indeed, that is what he's implying).

Lighten up guys! I'm not into TA but even with my limited knowledge I can interpret what BFG is saying as "with respect to the short term trend the stock is bouncing of the low and it LOOKS like it will go up for a while." That doesn't imply a guarantee or even necessarily a prediction for the medium term.

[Baa_Baa]

LOL, yeah I know its moosie. I just find his use of language can sometimes give the impression of surety/certainty, which is obviously specious. Just curious to know what he means by "confirmed." If he's implying that it won't fall through that level in future, I'd like to know how we can say that for certain (if, indeed, that is what he's implying).

It's spurious to suggest that a 'bounce' is "confirmed", or needs confirming. A bounce is just that, no more no less. One might be more interested in whether a new uptrend is confirmed, which technically it isn't, and won't be until overhead resistance is taken out at the very minimum $17.09 but more realistically $19 and for the more conservative types $20.04-20.15 where the previous double bottom occurred. JMHO, DYODD

[mattyroo]

Brave or stupid? Sorry mate, but why anyone would buy Xero at the moment defies belief. Look at the chart. If you're looking for a quick swing of a couple of percent there are plenty of stocks to do this without the risk that Xero currently has.

Rod spruiking the SP at today's meeting will only have a very short-term effect. Their problems are much more fundamental.

My pick is $17.

Well, it busted through that $17 mark with ease, next stop, if it falls through $15.50, $8. Hang on acolytes.

[Ryrynz]

it falls through $15.50, $8. Hang on acolytes.

Getting real sick of seeing sh!t like this..

[mattyroo]

Getting real sick of seeing sh!t like this..
Well maybe you shouldn't have bought at totally unwarranted heights...

[couta1]

Well maybe you shouldn't have bought at totally unwarranted heights...
Pull your head in mate chucking out numbers out of the air really is a lot of s--t, it doesn't worry me I'm past that but show a bit of sensitivity to Ryrnz (No I'm not going to comment on this thread as I said but I thought your post warranted a response)

[mattyroo]

Pull your head in mate chucking out numbers out of the air really is a lot of s--t, it doesn't worry me I'm past that but show a bit of sensitivity to Ryrnz (No I'm not going to comment on this thread as I said but I thought your post warranted a response)

Hang about, bucko. I'm not pulling numbers out of the air, or anywhere, for that matter. My numbers come from looking at the chart, I have been saying for a long time, longer than my earlier post on this, that this is going to hit 17$, now, the support is not strong at these levels and there is no evidence of sustainable buying that would imply a potential turnaround.

As I said before, 8$ here we come.

Perhaps you and fellow believers might be better to put your heads somewhere - the experience might be more pleasant than watching this tumble further.

Drongos.

[BFG]

Glad to see nothing has changed :)

[nextbigthing]

Chill people, please. Geez.

[Casino]

Rod says AFR report a load of ****

We have plenty of cash, no need for more

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11346441

So what prompted the AFR to report those figures and the listing date?
No/few new shares then? Just selflessly selling existing shares as a publicity stunt? What is the cost of this exercise? How does that compare to advertising/streaking at the super bowl? Why not try that first?

[BFG]

Yet you couldn't wait to come back?

How could I leave you loveable characters out in the cold??? :D

[Ryrynz]

Well maybe you shouldn't have bought at totally unwarranted heights...

If it was unwarranted then it wouldn't have been trading there.. I didn't see anyone saying.. don't buy it, it's at least double the value it should be! Short term trades only.

I just don't know where the value is in this company any more.. Rod I think it was was expecting a around $25 price.. I figured this was safe? Maybe some bouncing around the lower twenties?

If I had known there was this much of a drive down.. It's like someone wants it dead.. a quick bit of news and it spikes up then it just gets dragged down further and further like everyone's forgotten it was even trading there or the news ever mentioned.

Now I'm at the same position I was four months ago.. will it hold any sort of value at it's current rate or will it tank further? My gut tells me it'll tank..
Yet I still hope it won't but if this has taught me anything it's this.. don't ride on hope.. but it's so bloody hard not to..

Then you got the ones cheering on $10. Woot! drag it through the mud! I'll buy at bottom dollar I'll get filthy rich!

Yeah off other people's backs mate. Not sure what's more sickening TBH. But then this was happening at $30 for $17.. and look how that played out.

It was a bad move to even consider this long term... hard to believe it rode so high on market sentiment.. you'd think the company or the NZX would reign it in..
Anyway...

[BFG]

Ry, I suggest two books for immediate reading.

1) A Random Walk Down Wall Street by B G Malkiel to understand why timing is everything if you're going to play this short-term game and why long term holds are the winning way for the vast majority of investors.

2) Dot.Con by John Cassidy to see how things get hyped all to hell and why wearing the "rational hat" never works with bubbles.