Xro - xero

[blackcap]

...but only by taking on some currency risk that you might not want to take on.

How do you take on currency risk? I am not sure if that is valid. You buy XRO the company whether it is listed on the NZX or the ASX and ultimately its value will be what it is. IF the AUD tanks, then if the company is still worth what it is worth in NZD, then the stock price should jump and vice versa. I sometimes wonder if people overthink currency risk when investing offshore, or worry about it more than they need to.

[The BOWMAN]

XRO is a global company that receives majority of income not in NZD. Currency exchange rates will play a role on their financial result. But not because if its shares are traded in AUD or NZD.

Blackcap is absolutely correct.

[Oliver Mander]

XRO is a global company that receives majority of income not in NZD. Currency exchange rates will play a role on their financial result. But not because if its shares are traded in AUD or NZD.

Blackcap is absolutely correct.

I don't agree.

XRO will have currency management mechanisms in place - be it hedging or otherwise. They're in a better position than I am (as an individual) to optimise currency flows for NZD, be it through hedging, natural cost/revenue matching in same currency or cash swaps.

In short, they have access to mechanisms to manage the certainty of cashflows in NZD, that I cannot do.
As an ASX company, were I an investor, I need to manage my own currency conversion risk between NZ and AU. So I am now exposed to the risk as an individual, rather than "outsourcing" that to the company.

Essentially, you're exposed to a situation where XRO's enterprise value does not change, but you're exposed to another layer of risk because of translation between AUD and NZD.

[The BOWMAN]

I don't agree.

XRO will have currency management mechanisms in place - be it hedging or otherwise. They're in a better position than I am (as an individual) to optimise currency flows for NZD, be it through hedging, natural cost/revenue matching in same currency or cash swaps.

In short, they have access to mechanisms to manage the certainty of cashflows in NZD, that I cannot do.
As an ASX company, were I an investor, I need to manage my own currency conversion risk between NZ and AU. So I am now exposed to the risk as an individual, rather than "outsourcing" that to the company.

Essentially, you're exposed to a situation where XRO's enterprise value does not change, but you're exposed to another layer of risk because of translation between AUD and NZD.

You might be over thinking it. In essence, it is no different to investing in ASX XRO shares instead of NZX ones today. Investing in ASX XRO shares does not give you either exchange rate advantage or disadvantage from value perspective. Ignoring the small loss if you need to convert the currency for every trade.

[Oliver Mander]

You might be over thinking it. In essence, it is no different to investing in ASX XRO shares instead of NZX ones today. Investing in ASX XRO shares does not give you either exchange rate advantage or disadvantage from value perspective. Ignoring the small loss if you need to convert the currency for every trade.

You're assuming its a small loss, caused only by the transaction fees.
If the NZD moves violently against the AUD, that's a new risk (compared to investing in XRO directly).

If XRO's revenue streams were mostly based in New Zealand, I'd agree with you, as the enterprise value is determined by NZ$. But the fact that its so diverse means that the NZ$ / AU$ cross rate can move apart and have no impact whatsoever on XRO's enterprise value - and hurt or benefit NZ$ shareholders depending on the exchange rate movement.

definitely not overthinking it. Currency risk 101.

FWIW, I think the change in listing is a poor decision, and the reasons given by Mr Drury were the largest load of rotten milk that this pussycat has had to swallow for some time.
We shall see, though...its their call and they must have their reasons.

[The BOWMAN]

You're assuming its a small loss, caused only by the transaction fees.
If the NZD moves violently against the AUD, that's a new risk (compared to investing in XRO directly).

If XRO's revenue streams were mostly based in New Zealand, I'd agree with you, as the enterprise value is determined by NZ$. But the fact that its so diverse means that the NZ$ / AU$ cross rate can move apart and have no impact whatsoever on XRO's enterprise value - and hurt or benefit NZ$ shareholders depending on the exchange rate movement.

definitely not overthinking it. Currency risk 101.

FWIW, I think the change in listing is a poor decision, and the reasons given by Mr Drury were the largest load of rotten milk that this pussycat has had to swallow for some time.
We shall see, though...its their call and they must have their reasons.

um... we can both hold our own views.

On the decision itself, eventually I think Xero needs to get on NASDAQ to raise its profile globally. It is good to have large volume traded through this dip. Not good to have a lot of people with large profit on paper. Always need shakeups like this to wash some of them out.

[blackcap]

).

If XRO's revenue streams were mostly based in New Zealand, I'd agree with you, as the enterprise value is determined by NZ$. But the fact that its so diverse means that the NZ$ / AU$ cross rate can move apart and have no impact whatsoever on XRO's enterprise value - and hurt or benefit NZ$ shareholders depending on the exchange rate movement.



FWIW, I think the change in listing is a poor decision, and the reasons given by Mr Drury were the largest load of rotten milk that this pussycat has had to swallow for some time.
We shall see, though...its their call and they must have their reasons.

Ignoring transaction costs as they are tiny. Whether XRO is trading on the ASX or the NZX will make no difference to the value of XRO in NZD. whatever the exchange rate is there will be a NZD value assigned to XRO. IF the AUD were to plummet violently, then the XRO share price would commensurately rise violently to reflect this new paradigm. So I see no currency risk whatsoever. Just like now, the ASX price of XRO will reflect what it is worth in NZD (the nzx traded XRO price) divided or multiplied by the currency factor.

Agree with your second point that the change in listing is poor and not necessary. But the NZX has not been friendly to issuers for a while now. From what I can glean it is a very bureaucratic organisation that does not really engender support.

[Ace]

You might be over thinking it. In essence, it is no different to investing in ASX XRO shares instead of NZX ones today. Investing in ASX XRO shares does not give you either exchange rate advantage or disadvantage from value perspective. Ignoring the small loss if you need to convert the currency for every trade.

If you purchase shares in another exchange/currency compared to your home currency you WILL expose yourself to currency or exchange risk.

[The BOWMAN]

If you purchase shares in another exchange/currency compared to your home currency you WILL expose yourself to currency or exchange risk.

Interesting so many investors don't understand in this case, it doesn't matter at all as far as the XRO shares are concerned. No wonder the knee jerk reaction.

[RGR367]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11942805

And on this, Brian Gaynor said: "Two of its biggest problems are the huge amount of off-market trading and the dominance of one broker. The NZX needs to address these issues immediately if it wishes to boost the integrity and long-term viability of the New Zealand sharemarket" but did not identify the broker. Would anyone know who that broker be?



FYI and answering my above question and as per NBR pay walled article yesterday, that broker is First New Zealand Capital (FNZC).

[winner69]

Interesting so many investors don't understand in this case, it doesn't matter at all as far as the XRO shares are concerned. No wonder the knee jerk reaction.

I too was wondering what this discussion was all about

[Oliver Mander]

I too was wondering what this discussion was all about

ok, I'll bite.
Please educate me.

The below picture is the example that shows the hypotheticals. Basically, XRO value remains the same in real terms, but the NZ$ moves (either way) against the AU$.
it assumes that no other exchange rates move - just the AU$/NZ$ cross rate. An extreme example, but highlights the point.
9276

XRO's value hasn't changed - still doing what it does. But as an NZ$ investor, wanting to repatriate my cash at one point, I am exposed to translation risk - specifically between the AUD and NZD - that wasn't there before.

So - where is the error in my logic?

[mikeybycrikey]

ok, I'll bite.
Please educate me.

The below picture is the example that shows the hypotheticals. Basically, XRO value remains the same in real terms, but the NZ$ moves (either way) against the AU$.
it assumes that no other exchange rates move - just the AU$/NZ$ cross rate. An extreme example, but highlights the point.
9276

XRO's value hasn't changed - still doing what it does. But as an NZ$ investor, wanting to repatriate my cash at one point, I am exposed to translation risk - specifically between the AUD and NZD - that wasn't there before.

So - where is the error in my logic?


Imagine in this theoretical example that the only asset the company held was a NZD$4.3 B bank account. How would you then change the spreadsheet?

You seem to be thinking that with the company listed in Australia that the AUD share price is now fixed and it is your NZD conversion that will change. Instead it is likely the the AUD share price would rise/fall but your NZD converted value would stay the same.

In your example of the exchange rate going to 0.8, the value of the company is still $4347 NZD, which converts to AUD3477. And the Aussie share price would become AUD25.12.

Make sense?

Obviously reality is more complex than that since much of Xero's income comes in AUD (and GBP and USD, etc)

[Oliver Mander]

Imagine in this theoretical example that the only asset the company held was a NZD$4.3 B bank account. How would you then change the spreadsheet?



The trouble is that it doesn't hold a $4.3bn NZ$ bank account - I've already said in an earlier post that if its revenue was generated in NZ$, then I would agree with you that there is no additional currency risk.
But that's not the case - it generates sod all of its revenue in NZ. Its value is generated by income from a basket of currencies. That's actually a red herring though (herring is much loved by this particular cat incidentally).
The real issue is that the enterprise value is expressed by a tradeable share on the ASX - in AU$. So the only risk I am worried about is what happens between the AU$/NZ$ so I can get my cash back.

[longy]

I am excited that they finally making profit.... for the first time. I am excited as to where to from here for them.

I have got out on NZX a couple of days ago and bought it back on ASX yesterday. My brain could not digest all the details re fuss over exchange rate De-listing stuff but seemed logical to me at that time.

[winner69]

I am excited that they finally making profit.... for the first time. I am excited as to where to from here for them.

I have got out on NZX a couple of days ago and bought it back on ASX yesterday. My brain could not digest all the details re fuss over exchange rate De-listing stuff but seemed logical to me at that time.

Net LOSS was $21m

Cash burn of $34m

[mikeybycrikey]

The trouble is that it doesn't hold a $4.3bn NZ$ bank account - I've already said in an earlier post that if its revenue was generated in NZ$, then I would agree with you that there is no additional currency risk.
But that's not the case - it generates sod all of its revenue in NZ. Its value is generated by income from a basket of currencies. That's actually a red herring though (herring is much loved by this particular cat incidentally).
The real issue is that the enterprise value is expressed by a tradeable share on the ASX - in AU$. So the only risk I am worried about is what happens between the AU$/NZ$ so I can get my cash back.

Yes but this is the current situation too.

Why is the EV suddenly fixed in AUD just because the listing is on the ASX? Surely the EV should be in AUD now given your logic. In which case you already have this problem, it's just that someone as already doing the AUD conversion for you.

You seem to be conflating two different currency issues, one of which already exists.

[Oliver Mander]

Yes but this is the current situation too.

Why is the EV suddenly fixed in AUD just because the listing is on the ASX? Surely the EV should be in AUD now given your logic. In which case you already have this problem, it's just that someone as already doing the AUD conversion for you.

You seem to be conflating two different currency issues, one of which already exists.

EV is in whatever currency the entity is listed on, or in whatever currency the investor wishes to receive it in.
I don't think I'm conflating the two currency issues - the one that already exists is the global diversity of their revenue. No problem with that.
The new one (the one that doesn't exist - yet) is valuing the entity in NZ$, as a NZ$ investor.

agree its no different to investing in other companies on ASX - but then, as investors, we're prepared to take the translation risk between the countries exchange rate.

[777]

I never knew investing was so complicated. Sometimes a bit of gain on the currency and sometimes a loss.

[winner69]

EV is in whatever currency the entity is listed on, or in whatever currency the investor wishes to receive it in.
I don't think I'm conflating the two currency issues - the one that already exists is the global diversity of their revenue. No problem with that.
The new one (the one that doesn't exist - yet) is valuing the entity in NZ$, as a NZ$ investor.

agree its no different to investing in other companies on ASX - but then, as investors, we're prepared to take the translation risk between the countries exchange rate.

Last paragraph the crux of the matter for you.

So your choice is to either hold your XRO.ASX when they transfer them over there (and live with the ups and downs of the $) or sell your XRO.NZ and pat yourself on the back for making heaps.

I think there’s a lot more other things that going to drive the value of XRO than a one off translation impact - like XRO operational and financial performance, will Aussies think more highly of XRO because it’s on the ASX, etc etc.

To me I reckon XRO shares will be worth a lot more in the future than they are now and where they are listed is a minor distraction.

[The BOWMAN]

I have got out on NZX a couple of days ago and bought it back on ASX yesterday. My brain could not digest all the details re fuss over exchange rate De-listing stuff but seemed logical to me at that time.

Xero is going to do this for you in Jan 2018, without you lifting a finger, or pay commission fee, or lose on exchange rate difference. I wonder how many investors have done this. If there is plenty of them, it will create a perfect U shape like what it seems to be now. (Selling a few days back on NZX and now busy buying back on ASX)

I am actually curious about how others interpret the impact of their financial performance from the report on Share Price (without considering the de-listing), positive? or negative?

[Oliver Mander]

Last paragraph the crux of the matter for you.

So your choice is to either hold your XRO.ASX when they transfer them over there (and live with the ups and downs of the $) or sell your XRO.NZ and pat yourself on the back for making heaps.

I think there’s a lot more other things that going to drive the value of XRO than a one off translation impact - like XRO operational and financial performance, will Aussies think more highly of XRO because it’s on the ASX, etc etc.

To me I reckon XRO shares will be worth a lot more in the future than they are now and where they are listed is a minor distraction.

Fair call winner.
Separate the company from the currency exposure, and it might still be worth investing in. Only point I was trying to make is that there is definitely an exposure that wasn't there before, and I think NZ investors should be 'awake' to that.

[longy]

Xero is going to do this for you in Jan 2018, without you lifting a finger, or pay commission fee, or lose on exchange rate difference. I wonder how many investors have done this. If there is plenty of them, it will create a perfect U shape like what it seems to be now. (Selling a few days back on NZX and now busy buying back on ASX)

I am actually curious about how others interpret the impact of their financial performance from the report on Share Price (without considering the de-listing), positive? or negative?

Yes. I have been with Xro long enough and to know it could go a lot lower for no good reason. It is about protecting the profit really for me.

[mikeybycrikey]

I am excited that they finally making profit.... for the first time. I am excited as to where to from here for them.

I have got out on NZX a couple of days ago and bought it back on ASX yesterday. My brain could not digest all the details re fuss over exchange rate De-listing stuff but seemed logical to me at that time.

According the Xero's document about the transition (https://www.nzx.com/announcements/310041), you could have been moved to the ASX register by getting in touch with the share registry or your broker rather than selling and re-buying. Info is on page 6 of the document.

[bull....]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11944518

story about xero and fund managers calling special meeting stop them going asx

be a good move xero explanation just doesnt make sense esp not having a dual listing

[Toasty]

https://www.stuff.co.nz/business/industries/98979330/xero-boss-rod-drury-selling-95-million-of-xero-shares

Should be an interesting day today!

[mondograss]

Hmmm, yes last time he did that the share price tanked as I recall.

[Toasty]

On the positive side it sounds like it means that institutional investors want in. They must see more value down the line.

[bull....]

On the positive side it sounds like it means that institutional investors want in. They must see more value down the line.

probably selling to his buddies on the asx

technically could be a lower top if it falls today - very bearish esp if goes below recent lows

[moka]

probably selling to his buddies on the asx

technically could be a lower top if it falls today - very bearish esp if goes below recent lows

Last time Drury sold in 2015 I remember wondering why the share price was rising when there was no news. It went over $20 and then the news came out that he had sold shares, and yes the price fell again to under $20.
I don’t begrudge him the money – he has earned it and he deserves it but it is interesting how the share price rises just as he sells. I was wondering why the share price was rising the last couple of days when it fell after the results on 9 November, bottomed on 13th at $30.74 and then started rising for no reason I could understand and then today the news that Drury has sold.

It is down now 2.3% 75c to $32.50

http://www.afr.com/street-talk/xero-ceo-rod-drury-selling-85m-stake-credit-suisse-on-board-20171116-gzmwgk
Credit Suisse's equities desk was in the market with an $85 million block of Xero shares late on Thursday.
The broker was seeking buyers on behalf of Xero chief executive officer Rod Drury, who is reducing his stake in the company.
The shares were being offered at $28.45 each. The stock closed at $29.88 on Thursday.

[moimoi]

Clearly Mr Dury didn't want the currency risk of a sole ASX listing either.... ;-)

[The BOWMAN]

XRO's most immediate rival right now is MYOB at the moment. MYOB is a ASX200 company while XRO is ASX300.

Many customers would form a view based on this that MYOB is one tier higher than XRO hence more successful and better than XRO. So what's been said about the reason to move to ASX does make some good sense.

I truly hope kiwi investors can see the bigger picture and realise the currency thing is so trivia in the overall schema of things. In terms of fund managers, there are a lot more of them across the ditch, with much more money.

[whatsup]

and MYOB just bought an add on company for circa $130 mill a couple of days ago !!

[The BOWMAN]

https://www.stuff.co.nz/business/industries/98979330/xero-boss-rod-drury-selling-95-million-of-xero-shares

I shouldn't be judging, but the comments left under the news are pitiful.

[bull....]

XRO's most immediate rival right now is MYOB at the moment. MYOB is a ASX200 company while XRO is ASX300.

Many customers would form a view based on this that MYOB is one tier higher than XRO hence more successful and better than XRO. So what's been said about the reason to move to ASX does make some good sense.


I truly hope kiwi investors can see the bigger picture and realise the currency thing is so trivia in the overall schema of things. In terms of fund managers, there are a lot more of them across the ditch, with much more money.


how come fisher and paykel healthcare have managed to have a successful duel asx and nzx listing?

[The BOWMAN]

how come fisher and paykel healthcare have managed to have a successful duel asx and nzx listing?

Not an apple to apple comparison.

In the cloud application service market, market position is the number one thing as most customers won't dive deep to understand the difference of the products. Decisions are often made by superficial subjective views. If Xero is not in the top tier, many won't even consider it full stop.

MYOB has just released their 2017 Investor Presentation material, in there, they rated Xero being an "Occasional Competitors", which is at the bottom tier of the Cloud Accounting competitors. There are SEVEN other products they listed above Xero.

In Australia along, MYOB runs more than 50 events each year talking to many thousands of accountants, and show them this type of information.

It's more about telling the story, less about the product.

F&P healthcare is different.

[Toasty]

https://www.stuff.co.nz/business/industries/98979330/xero-boss-rod-drury-selling-95-million-of-xero-shares

I shouldn't be judging, but the comments left under the news are pitiful.

Welcome to the average Kiwi's fear of anyone being successful. I despair at the pathetic attitude of a large section of our population.

[The BOWMAN]

Significant larger volume of XRO share trading on ASX today, which is a good sign.

[moka]

https://www.stuff.co.nz/business/industries/98979330/xero-boss-rod-drury-selling-95-million-of-xero-shares

I shouldn't be judging, but the comments left under the news are pitiful.

Yes and economics theory is based on the rational man. Man the rational logical thinker. Yeah right!

[moka]

Significant larger volume of XRO share trading on ASX today, which is a good sign.

NZX – turnover -3 million shares for $95m would be mostly the sale of Drury’s 3 million shares.
ASX - 1.6m shares for $46m turnover probably the buying of Drury’s shares?

[777]

NZX – turnover -3 million shares for $95m would be mostly the sale of Drury’s 3 million shares.
ASX - 1.6m shares for $46m turnover probably the buying of Drury’s shares?

He can't sell the same shares twice so not possible.

[winner69]

He can't sell the same shares twice so not possible.

Maybe the buyer of Rods shares selling them ......after all they said it would improve liquidity

[777]

Maybe the buyer of Rods shares selling them ......after all they said it would improve liquidity

True..... but time is still needed to transfer registers.

[Baa_Baa]

https://www.stuff.co.nz/business/industries/98979330/xero-boss-rod-drury-selling-95-million-of-xero-shares

Should be an interesting day today!

Sure was, market shrugged off Rod's sales of a paltry 3m shares for a take home pay of $95m (minus fees). That leaves him remaining as the largest shareholder with 12.8 per cent and 17.7 million shares, a tidy $584,277,000 at today's closing price.

:eek2: that's a lot of moola, with previous sell downs, it's about $70 million per annum average for each of the ten years he's built up the company (not inc salary and benefits).

[bull....]

good for the traders, 4 - 5 dollar swings

[bull....]

charting speak - xro topped out around 34, lower high which in t/a can be considered a bearish sign esp if it falls under the previous low point - im not in but watching for now , i always find it fascinating to watch these t/a patterns to see if they pan out.

[bull....]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11950455

milford asset management trying to put xero leaving to aus.

Happy to see a nz fund manager actually trying to look after there unit holders too many of them do nothing.

totally agree that the nzx over stepped there rules. what sort of message is the nzx saying? go figure shoot them selves in the foot no wonder nzx share price in the doldrums too collapsed after there dumb decision.

[Joshuatree]

Not an apple to apple comparison.

In the cloud application service market, market position is the number one thing as most customers won't dive deep to understand the difference of the products. Decisions are often made by superficial subjective views. If Xero is not in the top tier, many won't even consider it full stop.

MYOB has just released their 2017 Investor Presentation material, in there, they rated Xero being an "Occasional Competitors", which is at the bottom tier of the Cloud Accounting competitors. There are SEVEN other products they listed above Xero.

In Australia along, MYOB runs more than 50 events each year talking to many thousands of accountants, and show them this type of information.

It's more about telling the story, less about the product.

F&P healthcare is different.

That to me does not explain why it cant be dual listed. This would be a great solution and a win /win for both shareholders and exchanges imo. More explanations why not welcome.

[Novitiate]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11950455

milford asset management trying to put xero leaving to aus.

Happy to see a nz fund manager actually trying to look after there unit holders too many of them do nothing.

totally agree that the nzx over stepped there rules. what sort of message is the nzx saying? go figure shoot them selves in the foot no wonder nzx share price in the doldrums too collapsed after there dumb decision.

Interesting also, though, to see Brian Gaynor's article, especially re the the amount of of amount of off-market trading on NZX and its affect on the market price.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11945219

[Leftfield]

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11950455

milford asset management trying to put xero leaving to aus.

Happy to see a nz fund manager actually trying to look after there unit holders too many of them do nothing.

totally agree that the nzx over stepped there rules. what sort of message is the nzx saying? go figure shoot them selves in the foot no wonder nzx share price in the doldrums too collapsed after there dumb decision.

Thanks for posting..... good to see this being led by Milford. Let's hope NZSA gets involved to.

[Beagle]

https://www.nbr.co.nz/article/milford-demands-nzx-action-xero-delisting-th-210623

With link to actual letter at the foot of the article. I think Gaynor has a good point.

[peat]

I think Gaynor has a good point.

Yes he totally does. NZX so weak that it cant even enforce the rules that would serve to enhance their business.
It is hard to understand why Xero are so adamant to leave NZX and it seems to me (despite all the public statements to the contrary) that there must be some form of animosity.
The only benefit I can see is saving of listing fees and ongoing requirements to adhere to two separate regulatory environments. Surely these costs are not large enough to make them leave??

[Leftfield]

I agree with other posters on this. NZX needs to stand up and be counted otherwise it risks an erosion of it's credibility. NZ needs and deserves a strong Stock Exchange (and regulator.)

I also like this point in Gaynor's letter



"The alternative is to require Xero, under Listing Rules 5.4.1 (b), to buy back shares fromprejudiced shareholders at $34.05 per share, the company’s share price immediately before thepre-delisting announcement. "

[zgnz]

Props to Brian Gaynor & Milford for doing this.


I understand some benefits to what Xero are attempting to do. But considering 2/3rds of XRO's volume is traded on the NZX, the whole move seems very premature.


- Your typical NZ Punter (and Xero employees with shares) are going to be disadvantaged having to exchange between NZD & AUD when it comes to buy & sell (especially with the FX rates NZ Brokers charge to your average retail investor.)

- Passive & managed funds which are mandated to trade on NZX only are going to be forced to sell around the same time (and if there aren't enough buyers, guess what happens to the price..)


How the directors can make this decision without shareholder sign off baffles me.

[bull....]

Props to Brian Gaynor & Milford for doing this.


I understand some benefits to what Xero are attempting to do. But considering 2/3rds of XRO's volume is traded on the NZX, the whole move seems very premature.


- Your typical NZ Punter (and Xero employees with shares) are going to be disadvantaged having to exchange between NZD & AUD when it comes to buy & sell (especially with the FX rates NZ Brokers charge to your average retail investor.)

- Passive & managed funds which are mandated to trade on NZX only are going to be forced to sell around the same time (and if there aren't enough buyers, guess what happens to the price..)


How the directors can make this decision without shareholder sign off baffles me.


the brokers will make a killing on nz shareholders selling if it lists in aus only through the 1- 2c margin they will cream on forex.

$100000 xero shares at say 91c forex on time of listing if you sell later at 91c forex spot your broker might give you 93c so 2c forex loss = $2000

wow you just lost $2000 by selling at the same rate

[RGR367]

Forget about Gaynord and/or Milford as Intuit behemoth is the one that XRO should be looking after since they're saying that the Tanker has turned around https://digitalfirst.com/intuits-plans-quickbooks-online-span-erp-practice-suites-loans/?utm_source=ActiveCampaign&utm_medium=email&utm_content=Intuit+Plans+to+Turn+QuickBooks+into+a +Giant+Killer%3B+and+it+s+Party+Time%21&utm_campaign=Weekly+Newsletter+011217

[Baa_Baa]

Forget about Gaynord and/or Milford as Intuit behemoth is the one that XRO should be looking after since they're saying that the Tanker has turned around https://digitalfirst.com/intuits-plans-quickbooks-online-span-erp-practice-suites-loans/?utm_source=ActiveCampaign&utm_medium=email&utm_content=Intuit+Plans+to+Turn+QuickBooks+into+a +Giant+Killer%3B+and+it+s+Party+Time%21&utm_campaign=Weekly+Newsletter+011217

Agree, the Xero double down on the US market was essentially a poke at intuit, even literally Rod poked them. So awakened the giant Intuit, who sees the upstart Xero has some cool stuff and goes after them by basically replicating the strategy and online app/practice models. Is it surprising that Xero growth in the do or die USA market is so unimpressive? I think it's the festering sore on Xeros playbook and they could do a lot more to instil confidence that the double down play is working, or going to work, even after a couple of market strategy reboots. I didn't see that in the recent results/commentary, more so a veiled retreat or diminished focus on US market as the holy grail.

[Lola]

[QUOTE=Baa_Baa;694777]Agree, the Xero double down on the US market was essentially a poke at intuit, even literally Rod poked them. So awakened the giant Intuit, who sees the upstart Xero has some cool stuff and goes after them by basically replicating the strategy and online app/practice models. Is it surprising that Xero growth in the do or die USA market is so unimpressive? I think it's the festering sore on Xeros playbook and they could do a lot more to instil confidence that the double down play is working, or going to work, even after a couple of market strategy reboots. I didn't see that in the recent results/commentary, more so a veiled retreat or diminished focus on US market as the holy grail.[/QUOTE

HERO TO ZERO?
Pretty selfish strategy
There must be a wrinkle in Aussie takeover rules vis a vis NZX regulations that make this appealing to Rod and Peter

[moka]

https://www.stuff.co.nz/business/industries/99435022/nzx-decides-to-let-xero-go-without-a-fight
The NZX has turned down an appeal from Auckland-based fund manager Milford Asset Management to intervene in Xero's planned delisting from the exchange.

https://www.stuff.co.nz/business/industries/99454029/nzx-swallows-bitter-pill-in-xero-delisting
Could the NZX have forced Xero to put delisting to a shareholder vote?
The NZX says it could have done, and it certainly appears to have considered doing so, but it decided not to require a vote, given the rights of Xero shareholders will be "substantially unchanged".
Xero says any vote could not have been binding on the company anyway, as it is only the listing that is changing, not the country in which it will be resident, which remains New Zealand.
The bottom line is that Xero would almost certainly have won any vote anyway as only 30 per cent of its shares are held by New Zealanders, and more than 40 per cent of those shares are owned by chief executive Rod Drury.
Shareholder votes rarely go against the board's wishes, so a vote would probably at most have only caused some embarrassment – arguably both for Xero and the NZX .

https://www.radionz.co.nz/news/business/345182/xero-challenged-over-quitting-nz-sharemarket
But Xero chief executive Rod Drury said the issue had already been settled with shareholders and the NZX. "What he (Gaynor) seems to be saying is that our corporate strategy should be dictated by the mandate of a small New Zealand fund that doesn't own that much of us," he said.

https://www.stuff.co.nz/business/opinion-analysis/99391501/Xero-can-t-have-it-both-ways
How can the rights of shareholders be 'substantially unchanged' when they have no say where a company they own is listed?
Drury recently won the Deloitte/NZME Top 200 Visionary Leader award. The judges said he demonstrated tremendous vision and achieved a real impact.
There's no denying he's exceptionally driven and clever, but I find his vision lacking.

[moka]

Xero to delist - whose decision is this? I reckon it is Xero’s as part of their corporate strategy, not the shareholders.
I can understand why they want to list on just one market. I can understand that they want to grow and moving to the ASX is the way to achieve this.
In the video below Rod Drury explains why Xero is delisting in NZ, which is that Xero has aspirations to keep growing and over that the next 3 – 4 years there is so much opportunity. They don’t want to pay dividends and want to invest in continuing to grow. They have struggled to get the really big strategic global growth investors to invest down here in NZ because it is a small scale market. And they really need those big global investors to grow. They need to consolidate the liquidity on one market to achieve growth. Well done Xero! I think Rod Drury has plenty of vision.

https://www.nbr.co.nz/article/nzx-rejects-milford-demands-xero-th-p-210659

[RGR367]

TY Moka for answering your contradiction on Drury's vision :p

[bull....]

charting speak - xro topped out around 34, lower high which in t/a can be considered a bearish sign esp if it falls under the previous low point - im not in but watching for now , i always find it fascinating to watch these t/a patterns to see if they pan out.

getting close

[bull....]

getting close - drury smart cookie selling some recently , good timing as it looks like heading lower due to rotation out of tech shares into value

[Leftfield]

getting close - drury smart cookie selling some recently , good timing as it looks like heading lower due to rotation out of tech shares into value

I wonder if it's also due to the impending ASX move? (Disc no longer holding, I took my gains recently around $32.)

[bull....]

I wonder if it's also due to the impending ASX move? (Disc no longer holding, I took my gains recently around $32.)

probably that too, guessing why would you buy when heaps people gotta sell

[axe]

do you think RD knew what the fallout from NZX delisting and pending asx move when he sold last big packet of shares recently ?


probably that too, guessing why would you buy when heaps people gotta sell

[Baa_Baa]

do you think RD knew what the fallout from NZX delisting and pending asx move when he sold last big packet of shares recently ?

Check out what happened the last couple of times he sold. You could argue he doesn't 'need' the money and this and the last payout were serious dough, so fair to say he has impeccable timing, perhaps the best short/medium term indicator of SP direction.

[Joshuatree]

Anyone know what his shares cost him? They are/were worth over $600 million last i looked.

[Baa_Baa]

Anyone know what his shares cost him? They are/were worth over $600 million last i looked.

That's dumb question, they cost him nothing except his seed money and tireless efforts as CEO and founder which have been recompensed somewhat by his salary. Rod is the founder of the company, founders don't have to buy their shares. And his remaining holdings are not worth over $600m at current SP, but they are worth a great deal.

[777]

Founders don't have to buy their shares. That's a new one.

Usually they have put money in before they go to the public to pay for the growth. They would keep a % of the company to reflect the time and the money they have already invested. So they have paid for their shares.

[Joshuatree]

That's dumb question, they cost him nothing except his seed money and tireless efforts as CEO and founder which have been recompensed somewhat by his salary. Rod is the founder of the company, founders don't have to buy their shares. And his remaining holdings are not worth over $600m at current SP, but they are worth a great deal.

Dont need to be offensive Baa but you find that easy?. So he has bought no shares on mkt not a good look in my book.

[Joshuatree]

Founders don't have to buy their shares. That's a new one.

Usually they have put money in before they go to the public to pay for the growth. They would keep a % of the company to reflect the time and the money they have already invested. So they have paid for their shares.

Thanks re him being the Founder.

[Toasty]

I would imagine that his Xero shares constitute around 70 to 80% of his wealth so if anything I would imagine he would sell more to spread his risk a little wider. He is the largest single shareholder so I don't think he has to send any signals to the market about his committment.

[Joshuatree]

Dropped from 20,719,779 to 17,719,777 this year. Shame leaving the NZX altogether imo. FPH for example saying true to their roots .

[mondograss]

It's a fine balance for a business founder I expect, too much ownership control and you stifle the company and don't let it mature, not enough and the investors think you lack confidence etc. Ian McCrae being a case where the founder has far too much control and is arguably hindering the company, the Robinsons of Rakon too. The Paykels have probably been a good example of how to do it right.

[arc]

Is there a "normal/strategic amount of shares a founder initially holds ?. 50% ?, 25% ?

[bull....]

looks like that technical pattern is playing out, bad bar yesterday

[Ggcc]

looks like that technical pattern is playing out, bad bar yesterday


of of course take into account that the New Zealand institutions need to offload so I expect prices to hit $26-$28 maybe even lower. Also Reuters classes this as an underperforming business. What do your charts say and what do you think will happen bull

[gbogo]

My chart says that if it stays below $30, target is $25. Hard to see it getting there before de-listing though.

[bull....]

My chart says that if it stays below $30, target is $25. Hard to see it getting there before de-listing though.

my chart has supports at 28 ,26 , 25

if they hadnt made there delisting announcement ( shows how negative announcement can change positive price action quickly ) i guess i wouldve been saying resistance at 35 , 40 , 45 it was shaping up as a very positive quarter of price action before.

[Beagle]

https://www.msn.com/en-nz/money/markets/shares-rise-xero-drops-on-leaving-nzx50/ar-BBGLb27?li=AA4Zjm&ocid=spartandhp

Wow...something like ~ $4.50 wiped off the SP about 14% since they announced the delisting some time back. Add in that the market overall has been fairly bullish of late and shareholders can possibly "thank" the directors for wiping perhaps $5-$6 off the SP compared to what it might have been without their decision.

I really don't get why they decided to delist seeing as its easy enough to stay dual listed but shareholders in PPH, (myself included) who replaced them in the NZX50 index are very grateful to Rod Drury for his decision.

[longy]

I THINK. They will list it on another exchange at some stage. My pick will be in US somewhere.

[Leftfield]

I THINK. They will list it on another exchange at some stage. My pick will be in US somewhere.

Course they will...... but IMHO it seems a stupid decision to turn their back on NZ shareholders.

Going to be interesting to see who does better in the long run, dual listed stocks such as ATM and PPH .....or XRO. I know which ones I'm backing!

[hardt]

Course they will...... but IMHO it seems a stupid decision to turn their back on NZ shareholders.

Going to be interesting to see who does better in the long run, dual listed stocks such as ATM and PPH .....or XRO. I know which ones I'm backing!

You would be silly not to back XRO right as they hit the earnings sweet spot... maintain the current course and XRO could be an absolute mammoth.

Valuations are always going to be thin on a high growth SaaS business, I am looking for an entry once the dust settles on the ASX.

Brief look at an optimistic model ( enough bearish models out there )

9341

[Leftfield]

You would be silly not to back XRO right as they hit the earnings sweet spot... maintain the current course and XRO could be an absolute mammoth.

Valuations are always going to be thin on a high growth SaaS business, I am looking for an entry once the dust settles on the ASX.

Brief look at an optimistic model ( enough bearish models out there )

9341

I respect and value your opinion Hardt. I have been a holder of XRO for over 3 yrs because I too think they have fabulous prospects, and I have made good SP gains with XRO. I may well buy in again at some point, but I prefer NZ coy's that are dual listed. So in the meantime, I'm happy to watch XRO from the sidelines (which sounds like you are doing.)

In the short term my decision to exit XRO has been spot on. Their SP has gone south while PPH (now my second largest holding and also just reaching the earnings sweet spot,) has gone north.

[Baa_Baa]

The bearish Harami today is not encouraging going at and failing against the 4+m shares (previous trading day) that decided the downtrend was intact and had had enough. Interesting times, Rod skimming a cool $90+m off the table and abandoning the NZX, this could take a while to shake out.

[Joshuatree]

https://diginomica.com/2017/12/12/comparing-xerocons-us-catching-rest-world/

Int subscriber growth in USA 43% but rev only 22%.

[Mat J]

Inuit press release from August 2017:
"Finished the year with 2,383,000 QuickBooks Online subscribers, driving growth to 58 percent, up from 41 percent."

https://www.intuit.com/company/press-room/press-releases/2017/intuit-revenue-up-12-percent-in-the-fourth-quarter-up-10-percent-in-fiscal-2017/

[RGR367]

#3 US of A client hitting XRO yet again http://www.quickbooks-blog.com/2018/01/horribly-brain-dead-xero-machine-learning-part-1.html

[winner69]

#3 US of A client hitting XRO yet again http://www.quickbooks-blog.com/2018/01/horribly-brain-dead-xero-machine-learning-part-1.html


He not impressed is he

Payroll still a mess in NZ from all accounts according to our accountant. Apparently lack off robust payroll stops a few / many SMEs from switching from MYOB.

[Everwood]

I recently sold my shares in Xero after first purchasing them in 2008. I believe a market correction is on the horizon and I only intend to hold onto good paying dividend stocks that I purchased at excellent entry points. I still intend to hold onto MOA which was a speculative bet and I only have a small holding compared other investments I've made.

I still believe Xero is a great company, so I might purchase Xero again at some point in the future. When the correction does happen, I intend to use my spectacular gains from Xero to purchase other stocks at better entry points.

[winner69]

Xero in the drivers seat to win bigtime in Australia

https://www.accountantsdaily.com.au/technology/11215-software-giants-tipped-to-make-new-land-grab-in-2018

[Joshuatree]

I recently sold my shares in Xero after first purchasing them in 2008. I believe a market correction is on the horizon and I only intend to hold onto good paying dividend stocks that I purchased at excellent entry points. I still intend to hold onto MOA which was a speculative bet and I only have a small holding compared other investments I've made.

I still believe Xero is a great company, so I might purchase Xero again at some point in the future. When the correction does happen, I intend to use my spectacular gains from Xero to purchase other stocks at better entry points.

Fantastic ride there Everwood!.another great example of its "the sitting" that makes one wealth rather than chopping and changing around. Hard to see the s/p of XRO 10 years ago on my chart but somewhere between zero and $1? Congrats on taking the money off the table and chucking it in the tin, must be a 30 bagger plus :t_up:. BTW from all the info ive read indications are for a Goldilocks year with what maybe a 5 to 10% correction at worst unless a big black swan materialises, CRYPTO?. i know a number of folks who cashed up in the last few years worrying about this correction and missing out on great gains. Someone will be right some day i guess. Thinking of Skid in particular.

[RGR367]

#3 US of A client hitting XRO yet again http://www.quickbooks-blog.com/2018/01/horribly-brain-dead-xero-machine-learning-part-1.html

This time he's hitting the behemoth http://www.quickbooks-blog.com/2018/01/professional-accountants-xero-and-intuit.html

[Toasty]

This time he's hitting the behemoth http://www.quickbooks-blog.com/2018/01/professional-accountants-xero-and-intuit.html

It reads as though he is back in Xero's camp? He has a crack at Brad from Intuit over unethical business practices a few blog entries back. Certainly a man of strong opinions.

[pierre]

I bought into XRO at just over $NZ6 in late 2012 and have been holding ever since. I've just
moved my holding over to the Aussie section of my portfolio - makes my ASX results look quite respectable now and camouflages the disaster that a few Oilers have proved to be over the years. Still holding those though waiting for a miracle to arrive.


Looks like the ASX is happy to have a few more Kiwi holders on board now - XRO SP is up $1.92 as I write. I'm not too distressed about that - and Rod Drury is probably moderately happy too. Early days of course, but he may have proved a few naysayers wrong.

[Shore]

Can someone outline how this all works.. my NZ holding as been ported over to the ASX. So, if I want to sell, I just engage an Aussie brokerage? Will I still be giving them my NZ FIN number for the holding etc? I haven't been issued with any other documentation?

[pierre]

Can someone outline how this all works.. my NZ holding as been ported over to the ASX. So, if I want to sell, I just engage an Aussie brokerage? Will I still be giving them my NZ FIN number for the holding etc? I haven't been issued with any other documentation?

Sorry Shore, I haven't fathomed all that out yet - not planning to sell anytime soon so not worrying me right now. I expect we will all receive a communication sometime soon as to how to deal with our holdings. Rod's probably a bit busy counting his money just now.

[Shore]

Yes admittedly I'm not tooo concerned myself either... very happy to watch the bump.. onwards to ASX200

[mikeybycrikey]

Can someone outline how this all works.. my NZ holding as been ported over to the ASX. So, if I want to sell, I just engage an Aussie brokerage? Will I still be giving them my NZ FIN number for the holding etc? I haven't been issued with any other documentation?

I received a letter the other day with information on what happens from here. You can view it here:
Announcement: https://www.nzx.com/announcements/313278
Letter: http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/XRO/313278/273325.pdf

Looks like Link will send you an SRN at some point soon. I imagine that many of the Kiwi brokers will handle Aussie holdings if you want to sell.

For more info, have a look at the information booklet that Xero sent out a few months back: https://www.xero.com/content/dam/xero/pdf/About%20Us/xeros-transition-to-a-sole-listing-on-the-asx.pdf

I feel like it shows how Xero has fallen out of favour on ST, that they can delist from the NZX and there are no posts on this thread for a whole week! Will be interesting to see how it goes.

[pierre]

I feel like it shows how Xero has fallen out of favour on ST, that they can delist from the NZX and there are no posts on this thread for a whole week! Will be interesting to see how it goes.

True - but pretty much back in favour now - up $A2.40 as I write. That's about $NZ2.60 - very favourable!

[The BOWMAN]

Finally, XRO is out of NZX, washing clean those speculative investors who bought in early, sitting on a profit, guessing for a speculative correction. Without the noise created from such shareholders, I think it will steadily moving upwards towards ASX200 in a couple of months and then ASX50 in a year or two.

In the meantime, XRO continues its winning hands against its dinosaur competitors:
http://www.afr.com/business/banking-and-finance/nab-to-allow-payments-through-xero-20180131-h0r2wz

[flyer]

justification from changing to ASX only already proven I would say based on today action.

[pierre]

justification from changing to ASX only already proven I would say based on today action.

Yep - most holders should be pretty pleased with a gain of $A3.32 on the first day after exit from the NZX. I know I am and guess that Rod probably will be too!

[Leftfield]

Yep - most holders should be pretty pleased with a gain of $A3.32 on the first day after exit from the NZX. I know I am and guess that Rod probably will be too!

I'm sure Rod and XRO holders will be happy with today's effort by the ASX.

However, the real un-answered questions are; Did its association with NZX hold back XRO's progress? Will XRO do much better now that it is free from NZX?

IMHO the Jury is out on these questions, and one day on the ASX is a bit too early to claim a victory.

Comparison with another dual listed stock such as ATM shows that XRO has considerable ground to make up and clearly dual ASX/NZX listing has not held back ATM.

Here's the comparison up to today. ATM is the blue line, XRO is the red. It will be interesting to re-visit this chart in a years time.

9444

[RGR367]

As per NZIER, XRO's contribution to the NZ economy https://nzier.org.nz/publication/xeros-economic-contribution-to-new-zealand

[winner69]

As per NZIER, XRO's contribution to the NZ economy https://nzier.org.nz/publication/xeros-economic-contribution-to-new-zealand

Pretty good eh

Just as will they staying in NZ so these numbers will grow

[pierre]

I'm sure Rod and XRO holders will be happy with today's effort by the ASX.

However, the real un-answered questions are; Did its association with NZX hold back XRO's progress? Will XRO do much better now that it is free from NZX?

IMHO the Jury is out on these questions, and one day on the ASX is a bit too early to claim a victory.

Comparison with another dual listed stock such as ATM shows that XRO has considerable ground to make up and clearly dual ASX/NZX listing has not held back ATM.

Here's the comparison up to today. ATM is the blue line, XRO is the red. It will be interesting to re-visit this chart in a years time.

9444
Not sure about your chart Left Field. ATM has gone from about $1 to $9 over 5 years. I don't think that's a 1700% gain - or have I missed something?
I also think you need to take the relative values of the shares into account. XRO was around $10 and has moved up to around $38 today. A 9x gain would take the price up to $90. 17x would require an SP of $170! A pretty big ask I think.

[mikeybycrikey]

However, the real un-answered questions are; Did its association with NZX hold back XRO's progress? Will XRO do much better now that it is free from NZX?

IMHO the Jury is out on these questions, and one day on the ASX is a bit too early to claim a victory.

The jump in the SP today seems much, much bigger than I would’ve expected from just the delisting. I do wonder how much of the rise was from that and how much was from the NAB announcement. That seems like it could be a big deal if rolled out to a few more banks.

[The BOWMAN]

The jump in the SP today seems much, much bigger than I would’ve expected from just the delisting. I do wonder how much of the rise was from that and how much was from the NAB announcement. That seems like it could be a big deal if rolled out to a few more banks.

Agree. Delisting will bring the benefit of no more sellers who are uncomfortable of holding ASX shares or are convinced there is "currency risk" for some reason. But it won't warrant a 10% climb. The NAB deal is pretty big. It proves that Xero is innovative, being a leader, and even large banks can't ignore the benefit (intelligence of its data) of connecting to their business. I will hold XRO for as long as I can't see another accounting software service company that is doing better things than them.

[Leftfield]

Not sure about your chart Left Field. ATM has gone from about $1 to $9 over 5 years. I don't think that's a 1700% gain - or have I missed something?

ATM has gone from around 50c to its current price.

My point was the real un-answered questions; Did its association with NZX hold back XRO's progress? Will XRO do much better now that it is free from NZX?

Time will tell.

[see weed]

Not sure about your chart Left Field. ATM has gone from about $1 to $9 over 5 years. I don't think that's a 1700% gain - or have I missed something?
I also think you need to take the relative values of the shares into account. XRO was around $10 and has moved up to around $38 today. A 9x gain would take the price up to $90. 17x would require an SP of $170! A pretty big ask I think.
sw bought 20,000 shares @ 47c on 5/2/15 if that's any help.

[pierre]

ATM has gone from around 50c to its current price.

My point was the real un-answered questions; Did its association with NZX hold back XRO's progress? Will XRO do much better now that it is free from NZX?

Time will tell.

OK - the ATM 5 year chart on ANZ Securities looked like it started at about $1 - I stand corrected.

As to your questions - your answer appears to be the correct one.

[Leftfield]

sw bought 20,000 shares @ 47c on 5/2/15 if that's any help.


My point is not about what you and I have made by our ATM holdings (which is fabulous btw) but rather that ATM has not been held back by the dual listing moans that Rod complains of. ATM operates in similar markets and has thrived.

My next point is that if we all shun NZX, then the NZ economy will end up more and more in the hands of the Aussies.

NZ needs independent banks (not aussie ones) and NZ needs an independent and strong NZX. I hope XRO's move is a wake-up call to NZX and not the start of a trend.

[hardt]

My point is not about what you and I have made by our ATM holdings (which is fabulous btw) but rather that ATM has not been held back by the dual listing moans that Rod complains of. ATM operates in similar markets and has thrived.

My next point is that if we all shun NZX, then the NZ economy will end up more and more in the hands of the Aussies.

NZ needs independent banks (not aussie ones) and NZ needs an independent and strong NZX. I hope XRO's move is a wake-up call to NZX and not the start of a trend.


We could soon be considered a ( bolt-on ) market if we are not careful...

There are benefits to being a sole ASX listing, why would businesses give up the increased exposure, liquidity and coverage of a market with exponentially more global reach.

Not to say there are any disadvantages of the dual listing, more so that the ASX offers far greater incentives to a company looking for expansion and greater chance of mergers/partners too.

[Leftfield]

We could soon be considered a ( bolt-on ) market if we are not careful...

There are benefits to being a sole ASX listing, why would businesses give up the increased exposure, liquidity and coverage of a market with exponentially more global reach.

Not to say there are any disadvantages of the dual listing, more so that the ASX offers far greater incentives to a company looking for expansion and greater chance of mergers/partners too.

I agree with the bolt-on bit.

Dual listing has demonstrably not held back other dual listed boys such as ATM and PPH etc.

I guess we need more details on the real costs of dual listing v sole listing to explain XRO's concerns.

[Toasty]

https://www.asx.com.au/asxpdf/20180305/pdf/43s54m25355b9b.pdf

Big news. Not sure whether this should be on the ASX thread or not. Any thoughts on what this means for Xero?

[RGR367]

https://www.asx.com.au/asxpdf/20180305/pdf/43s54m25355b9b.pdf

Big news. Not sure whether this should be on the ASX thread or not. Any thoughts on what this means for Xero?

Hard to imagine Rod is no longer at the helm but this is good for XRO imo.

[Ggcc]

A non executive director at Fletchers, plus he is a civil engineer with honours. I guess the market love it.........

[Raz]

A non executive director at Fletchers, plus he is a civil engineer with honours. I guess the market love it.........

hmmm If I was the founder and the growth story was drying up.... can't cut it in the US and here comes the competition ....I'd prefer to move on as well..

[Leftfield]

Glad I took XRO's decision to exit NZX as a signal to take my gains and exit last year. My related decision to boost my ATM stake has paid off nicely.

Am still a XRO fan, and hope it continues to perform for holders. Going to be interesting to watch the new CEO from afar.

[Baa_Baa]

hmmm If I was the founder and the growth story was drying up.... can't cut it in the US and here comes the competition ....I'd prefer to move on as well..

Will be interesting to see whether he takes another payday selldown, with around $100m value (from memory) presently locked up in shares.

[Toasty]

Will be interesting to see whether he takes another payday selldown, with around $100m value (from memory) presently locked up in shares.

I think its more like $500 to $600 million. He still holds around 15 million shares I think.

[bull....]

asx got xero as the sole listing and then got rid of drury? and put an aussie in charge .....

[Baa_Baa]

I think its more like $500 to $600 million. He still holds around 15 million shares I think.

Yeah, my bad shouldn't post while in a rush: I think it's still 12.8 percent and 17.7 million shares @ $31.29 Aus today = ~NZD$592m. Must be tempting to take home the big moola and leave a cool $100m or so in the game. Could do a lot of good philanthropic stuff with $500m. Gotta take your hat off to Rod, he's smashed it out of the park with XRO in terms of building a personal fortune, only pity really is that he didn't get to see and claim profitability while CEO. Not such a big deal in the scheme of things I suppose. Good luck to him.

[longy]

So Rod has realised that he does not have skillset required to drive the company's ongoing transformation into a multinational tech giant. Hence stepping aside and do what he loves and that is to develop the product... ect. Rod said "While working with Steve that became apparent and I started realising all the things I didn't know. I had to make sure we were making the big decisions now to create long-term shareholder value, while I get to do the bits I love." He also admitted having working with the new elected CEO he came to realised that he hasn't got what it takes to take this company beyond the next two years.

It is hard to think that Rod is no longer the CEO but yet it is not as I have always thought at some stage he would need to step aside and let someone else to have ago. 11 plus years in the same position of CEO in quite long these days. Also nice to read about he has no intention of taking on any external board positions at this stage and will not be selling down his significant shareholding of 12.8 per cent.

[Leftfield]

NZSA is not keen on Rod's replacement and his other directorships. Valid concerns IMHO. Here's what NZSA is saying.

"Many of you will have seen that Rod Drury is stepping down and Steve Vamos has been appointed the new CEO of Xero, effective 1 April, 2018.
Mr Vamos has indicated that he intends to continue with his directorships on both Fletcher Building and Telstra Corporation as well as taking on this new role.
While NZSA has no questions about his abilities, it is concerned that Mr Vamos may be unable to properly discharge his responsibilities to all three complex roles. We are not alone in this view. We note that:


[*=left]Xero is on a strong growth path in many different countries, likely to require a large amount of travel on top of the usual heavy CEO workload.

[*=left]Fletcher Building has a major task ahead of it to not only navigate through the current difficulties, but also to re-build confidence in the company’s governance. Both tasks will be demanding and much more time consuming than most directorships, especially as the Fletcher board is relatively small.

[*=left]Telstra is a very large Australian domiciled telecommunications company with all the challenges that entails. We note that Mr Vamos intends to remain Australian based. The Telstra board has ten members. In our view, these factors mean the Telstra position is the less onerous.

NZSA has a long standing policy guideline that, in order to allow them to adequately discharge their executive functions, CEO’s should hold only one unrelated directorship.
In our view, Mr Vamos should resign his Fletcher Building directorship soon after taking up the Xero role. A short delay may be acceptable to allow the Fletcher board time to appoint a replacement.
Should Mr Vamos choose to continue with all three roles, the Association intends to vote against his re-appointment to the Fletcher board at the first opportunity. We expect this would get wide support, as most institutional proxy advisors hold similar views to NZSA in regard to CEO/Director workload."

[mondograss]

XRO in the ASX 100, Vocus and Fairfax drop out.

[The BOWMAN]

Finally, XRO is out of NZX, washing clean those speculative investors who bought in early, sitting on a profit, guessing for a speculative correction. Without the noise created from such shareholders, I think it will steadily moving upwards towards ASX200 in a couple of months and then ASX50 in a year or two.


Much faster and larger first step than I predicted at the end of Jan. With this speed, probably ASX50 after the May financial report.

[artemis]

There'll be one or two local investors regretting they sold before the move to the ASX.

[Jonboyz]

So XRO.AX is not exempt from the FIF scheme for tax purposes. Anyone know whether it is likely to achieve exemption over the next year?

[mondograss]

I think you'll find it doesn't need an exemption per-se because it's a New Zealand resident company, therefore FIF doesn't apply.

[longy]

I have came across a site where you could find out if the companies are exempted.

[Leftfield]

There'll be one or two local investors regretting they sold before the move to the ASX.

No regrets here.

I sold for 3 reasons;
1.) Easier for small cap companies to double their SP than it is for a $35 share
2.) I don't invest in ASX shares and support NZX (I don't expect you to understand this, but it works well for me)
3.) I had held XRO for some time and was happy with the gains already made.

In terms of point 3, I think XRO is a game changer, and wish all investors well.

SSSooo don't worry about me, I'm fine taking my gains elsewhere.

[mikeybycrikey]

2.) I don't invest in ASX shares and support NZX (I don't expect you to understand this, but it works well for me)

Care to explain number 2 a little more? Do you have other investments outside NZX? Is it a bit of a personal “buy kiwi made” campaign?

I’ve been comfortable about Xero’s move to Australia but it has made me consider more what I want from my portfolio... probably more diversification.

However, the amount of research time I would need to put in to understand the Australian market and where to even look for a decent investment there doesn’t feel like a good use of my time.

[Leftfield]

Care to explain number 2 a little more? Do you have other investments outside NZX? Is it a bit of a personal “buy kiwi made” campaign?

If you read Jim Slater's 'The Zulu Principle', you may appreciate that it is relatively easy to have substantial market knowledge in small, well regulated emerging market as NZX. I have much more information on this market than on any other in the world, and I use that information to my benefit.

IMHO the NZX is underated as a safe and strong ‘emerging market’ and the underwriting strength of funds such as NZ Superannuation Fund, ACC, and Kiwi Saver are not yet fully appreciated.

NZX has a lot of knockers particularly around coys such as CBL. However I find the ASX just as bad – if not worse. Look at BIG on the ASX as an example. The NZSA is doing great work providing members with good information.

And yes, there is a degree of 'Buy Kiwi' in my stance - Kiwis constantly gripe about the ‘profits going overseas’ in a banking/insurance sector dominated by the Aussies, yet if we don’t back the NZX what have we left?

Lastly and very importantly, my returns since 2014 have been outstanding. My personal profile on this site details my Share Trading Competition results since 2014 and my real life portfolio has bettered this.

[winner69]

If you read Jim Slater's 'The Zulu Principle', you may appreciate that it is relatively easy to have substantial market knowledge in small, well regulated emerging market as NZX. I have much more information on this market than on any other in the world, and I use that information to my benefit.

IMHO the NZX is underated as a safe and strong ‘emerging market’ and the underwriting strength of funds such as NZ Superannuation Fund, ACC, and Kiwi Saver are not yet fully appreciated.

NZX has a lot of knockers particularly around coys such as CBL. However I find the ASX just as bad – if not worse. Look at BIG on the ASX as an example. The NZSA is doing great work providing members with good information.

And yes, there is a degree of 'Buy Kiwi' in my stance - Kiwis constantly gripe about the ‘profits going overseas’ in a banking/insurance sector dominated by the Aussies, yet if we don’t back the NZX what have we left?

Lastly and very importantly, my returns since 2014 have been outstanding. My personal profile on this site details my Share Trading Competition results since 2014 and my real life portfolio has bettered this.

Saw you profile and noted you had no Friends ....so sent you a request to be my Friend

[Leftfield]

Saw you profile and noted you had no Friends ....so sent you a request to be my Friend

Whoop de doo I should be honoured! (as Groucho Marx said, "Any club that would have me as a 'friend/member' is probably not worth joining." :cool:

[winner69]

Whoop de doo I should be honoured! (as Groucho Marx said, "Any club that would have me as a 'friend/member' is probably not worth joining." :cool:

Thought you be honoured ha ha

[mikeybycrikey]

If you read Jim Slater's 'The Zulu Principle', you may appreciate that it is relatively easy to have substantial market knowledge in small, well regulated emerging market as NZX. I have much more information on this market than on any other in the world, and I use that information to my benefit.

Thanks for this. Lots of good info and good to know you’ve put real thought into it. So much useful insight to gain here on ST.

[mikeybycrikey]

I'm wondering if the SP is getting a little ahead of itself, just like it did in 2014 when it got to about $42 on the ASX. Opening up by $1 on no real news today seems a little exuberant.

The difference between now and 2014 is that the SP probably was about 5 years ahead of itself then, now it's only about 25-30% ahead of where I feel like it should be (but obviously Mr Market knows best at least some of the time).

Seems like annual results are released next Thursday 10th May so will be interesting to see if the current SP froth is built on any substance.

[bobxia]

UBS have upgraded target price to 42.5, and also predict 100 dollars in 5 years. That’s what’s driving the price today.

[clarky]

Here’s hoping they exceed expectations! Plenty of upside in the UK, but need to keep an eye on expenses

[Malpaso]

I see the share price (in NZD) is close to where it was before it tanked back in 2015 - i always remember Rod saying don't panic, put your shares in the bottom draw and wait for the end of 2017. At $14 it was hard to swallow. Well he must have done his sums because here we are back at groundhog day; just wish i'd listened to his advise and kept them all :(. And still they go up......

[Toasty]

I've been in since the start and was always annoyed at myself for not selling out in the peak a few years ago. However we are here again and I am still reluctant to sell and lose contact with the story. I have sold a few on the way through and repaid my initial investment many times over however. My ideal scenario would be a Microsoft or similar company with deep pockets buying it out at $60 to $100 so I can let go of the rollercoaster.

[Shore]

I'm in the same boat as you Toasty. Bought in at $3 and have held on ever since, and wow it's been a roller coaster. I agree that I would also like to see a bigger company come along and purchase at a premium, thus relieving me of my indecision whether to sell or hold on. I still believe there's plenty of runway for Xero and a big future ahead, but I'm also sitting on big paper profits and it doesn't sit right with me to continue to hold and not realise the profits.

[blackcap]

I'm in the same boat as you Toasty. Bought in at $3 and have held on ever since, and wow it's been a roller coaster. I agree that I would also like to see a bigger company come along and purchase at a premium, thus relieving me of my indecision whether to sell or hold on. I still believe there's plenty of runway for Xero and a big future ahead, but I'm also sitting on big paper profits and it doesn't sit right with me to continue to hold and not realise the profits.

If you bought at $3, well done and good on you. Why not just sell 10% of your stock and then you will at least have reaped your initial investment whilst holding 90% going forward. Psychologically that might help? (not that it makes any sense from a financial point of view but it may ease the "does not sit right" feeling)

[Shore]

Thanks Blackcap. Yep I've done exactly that - sold some and recouped initial investment. Perhaps though it would be prudent to sell off a little more, just to mitigate the risk.

[blackcap]

Thanks Blackcap. Yep I've done exactly that - sold some and recouped initial investment. Perhaps though it would be prudent to sell off a little more, just to mitigate the risk.

Well with a price increase from $3 to $40+ it might be a large chunk of your portfolio and portfolio theory would indicate that it would be prudent to diversify the risk a bit. Up to you though. Good luck.

[Filthy]

https://www.asx.com.au/asxpdf/20180510/pdf/43txh0m5kxjc8t.pdf
https://www.asx.com.au/asxpdf/20180510/pdf/43txhqjvykn7xm.pdf

results out. haven't had a chance to review yet

[winner69]

https://www.asx.com.au/asxpdf/20180510/pdf/43txh0m5kxjc8t.pdf
https://www.asx.com.au/asxpdf/20180510/pdf/43txhqjvykn7xm.pdf

results out. haven't had a chance to review yet

Pretty amazing

Still burning tens of millions of cash but jeez who cares about ....believe the story

[mondograss]

The market seems to approve.

[winner69]

The market seems to approve.

Probably impressed with that positive ebitda number

[Toasty]

Pretty amazing

Still burning tens of millions of cash but jeez who cares about ....believe the story

Growing new customers at 40 to 50% per annum will turn that around pretty quickly. The South African market alone is huge as is South East Asia. Not sure about China but India would have to be a target. Bash out a local language version and away you go. They only need a small percentage of any market to make it wildly profitable and with the penetration they have now they have definite credibility.

Story still works for me.

[mondograss]

The key is to get the bank linkages in any given country. Once they have that sorted out they can engage the professional services community and away they go.

[mikeybycrikey]

A bit of a roller coaster in the SP today. Down 100 on open, then up 90 before finally closing down 139.

I still need to digest the information but it doesn’t seem that far off what I might’ve expected. These Xero announcements are getting a little predictable now!

Good growth from North America and RoW. Will be interesting to see what happens with RoW growth and revenue mix/ARPU over the next few years

[winner69]

will xero ever get to a billion dollar of revenues?

[Ggcc]

will xero ever get to a billion dollar of revenues?
maybe by 2023-25..........

[RGR367]

Another XRO competitor? https://www.nbr.co.nz/article/kpmg-microsoft-and-cba-team-take-xero-and-myob-ck-p-215624

[Toasty]

Another XRO competitor? https://www.nbr.co.nz/article/kpmg-microsoft-and-cba-team-take-xero-and-myob-ck-p-215624

Interesting. Poor choice of name already. Seems to be the same as quite a big online learning institiuion in India. https://www.wiise.co/. Unless its part of it somehow which doesn't seem likely.

https://www.arnnet.com.au/article/641169/kpmg-cba-microsoft-launch-new-erp-competitor/. A bit more info. I may be biased but it doesn't seem terribly original.

[Toasty]

All time high australian share price today. I don't see any news on this other than an indication that it might be driven by Steve Vamos taking over.

[gbogo]

All time high australian share price today. I don't see any news on this other than an indication that it might be driven by Steve Vamos taking over.

I believe Morgan Stanley has started coverage with Target Price of A$50

[mikeybycrikey]

I believe Morgan Stanley has started coverage with Target Price of A$50

What does "target price" actually mean? Is that a target price for today? Twelve months from now? Some other time?

I've seen it a few times but I'm never actually sure what is meant by it.

[winner69]

What does "target price" actually mean? Is that a target price for today? Twelve months from now? Some other time?

I've seen it a few times but I'm never actually sure what is meant by it.

Often/usually the price they ‘target’ in a years time. Also based on an assumption of what the share price will increase by in that time (usually 10%/15%)

So a target of $50 sort of means a price of $44/$45 today(depending on what increase % they use)

That’s how it was explained to me years ago by a broker

[moimoi]

What a run!!

The reasoning behind the move to the ASX, greater liquidity and increased investor coverage, was clearly well founded...

[couta1]

What a run!!

The reasoning behind the move to the ASX, greater liquidity and increased investor coverage, was clearly well founded... Closed at $51 NZ, that's awesome for the faithful, so many people have been wrong about this company.

[Toasty]

Pre open looks a bit ugly though. Profit taking frenzy today perhaps. Match price around $45 so maybe shed a lot of the last few days gains? Always interesting to see where it opens.

[RGR367]

No wonder we don't hear about XRO USA payroll development anymore. Giving up and just partnering with Gusto. https://www.xero.com/blog/2018/07/full-service-payroll-xero-gusto/

[longy]

No wonder we don't hear about XRO USA payroll development anymore. Giving up and just partnering with Gusto. https://www.xero.com/blog/2018/07/full-service-payroll-xero-gusto/

It is a good move I think given the complexity of the Tax system over there.

[RGR367]

It doesn't say for how much in acquiring Hubdoc https://finance.yahoo.com/news/xero-acquires-hubdoc-business-never-223500024.html

[ShareFodder]

It doesn't say for how much in acquiring Hubdoc https://finance.yahoo.com/news/xero-acquires-hubdoc-business-never-223500024.html

$60m USD (35% Cash 65% script) + $10m in 18 months based on targets.

It doesn't say what revenues Hubdoc has...

[winner69]

An interesting view

http://brontecapital.blogspot.com/2018/08/xero_1.html


XRO a 20 bagger from here?

[Raz]

An interesting view

http://brontecapital.blogspot.com/2018/08/xero_1.html


XRO a 20 bagger from here?

Thanks winner, certainly an interesting view, from my experience SME in the US are far larger than NZ peers, few hundred staff with 50-300 million turnover is common. When greater LA has ten million plus people..scale is so much easier to achieve.

[RGR367]

Thanks winner, certainly an interesting view, from my experience SME in the US are far larger than NZ peers, few hundred staff with 50-300 million turnover is common. When greater LA has ten million plus people..scale is so much easier to achieve.

As those following XRO have said before, "believe in the story" :cool:

[winner69]

Obviously Sharon doesn’t know Xero losses money hand over fist

Sharon Murdoch (@domesticanimal)
16/08/18, 10:28 AM
@roddrury tops #RichList (congrats). My 17yo student worked 3 days taking photos @ @Xero conf over sch hols using own gear & 100s of photos. Got $50 gift voucher & ref. Still waiting on ref. Worked 3 days last wk @ acupuncture conf, got $300 & ref. Life lesson right there!

[Toasty]

Obviously Sharon doesn’t know Xero losses money hand over fist

Sharon Murdoch (@domesticanimal)
16/08/18, 10:28 AM
@roddrury tops #RichList (congrats). My 17yo student worked 3 days taking photos @ @Xero conf over sch hols using own gear & 100s of photos. Got $50 gift voucher & ref. Still waiting on ref. Worked 3 days last wk @ acupuncture conf, got $300 & ref. Life lesson right there!

Hopefully the Xero people were just better negotiators than the acupuncture people....

[artemis]

Xero closing in on $AUD50. Doubt very much it would have got so far on the NZX.

[Ggcc]

Xero closing in on $AUD50. Doubt very much it would have got so far on the NZX.
I agree and struggle to understand why it is worth so much.

[RGR367]

XRO must be really owning Sage in UK https://www.ft.com/content/798a84dc-ad35-11e8-89a1-e5de165fa619

[Novitiate]

XRO must be really owning Sage in UK https://www.ft.com/content/798a84dc-ad35-11e8-89a1-e5de165fa619

Darn, I'm not a subscriber - what's the general gist of the article?

[RupertBear]

Why the drop today :confused: its been trucking along quite nicely until now :mellow:

[Joshuatree]

I think XRO may be caught in the big tech drop 5-6% on the ASX today too due to this last nite in USA
Tech Stocks Fall Amid Senate Hearing (https://www.wsj.com/articles/tech-stocks-retreat-as-senate-hearing-proceeds-1536167419?tesla=y&mod=article_inline)

[RGR367]

Darn, I'm not a subscriber - what's the general gist of the article?

I'm not a subscriber too but saw it on a tweet earlier and somehow I was able to read it then. Tried to go back based on the above link now but cannot access it anymore. Anyway, the gist is that the largest UK listed Tech stock Sage suffers missed targets and searches new chief.

[moka]

https://deadline.com/2018/09/teck-stocks-drop-on-regulatory-fears-1202457788/
(https://deadline.com/2018/09/teck-stocks-drop-on-regulatory-fears-1202457788/)

Major Tech Stocks Slump On Regulatory Fears After Senate Hearing

After top executives from Facebook (https://deadline.com/tag/facebook/) and Twitter (https://deadline.com/tag/twitter/) faced a grilling in the U.S. Senate (https://deadline.com/2018/09/senate-intelligence-committee-facebook-twitter-regulation-hammers-google-1202457412/) and reckoned with potential government regulation, investors gave the cold shoulder to their stocks and most of the tech sector.
Twitter fell 6% to end the session at $32.17. Jack Dorsey, the company’s CEO, repeatedly conceded to the Senate Intelligence Committee (https://deadline.com/tag/senate-intelligence-committee/) that the company needed to improve its safeguards deterring misuse of the social media platform. The hearing also follows a series of tweets and comments, based on scant evidence, from President Donald Trump insisting that tech platforms are biased against conservatives.

[moimoi]

Only 10% of XRO's customers are in the US. So a senate hearing to be forgotten in week seems unlikely to be the cause....

There has been a major selloff in Aussie blue chips this last week...

XRO BHP WPL ALL to name a few all thrashed by 10% or more in a few days.

Risk off flows and with the preponderance of algorithms these days results in buyer liquidity evaporating.

[mikeybycrikey]

Xero has announced that they are borrowing $US300 million in convertible notes.

Announcement is here: https://www.asx.com.au/asxpdf/20180926/pdf/43yp0pghpr9bq4.pdf

I've got no idea what the announcement actually means. There is lots of talk about call options, delta placement and other terms. Maybe convertible note issues are always a little indecipherable.

I wouldn't be surprised if there are going to be some acquisitions announced soon because why else would they want USD300m?

[mondograss]

Xero has announced that they are borrowing $US300 million in convertible notes.

Announcement is here: https://www.asx.com.au/asxpdf/20180926/pdf/43yp0pghpr9bq4.pdf

I've got no idea what the announcement actually means. There is lots of talk about call options, delta placement and other terms. Maybe convertible note issues are always a little indecipherable.

I wouldn't be surprised if there are going to be some acquisitions announced soon because why else would they want USD300m?

In this announcement they say they want it for acquisitions (paragraph 3):
https://www.asx.com.au/asxpdf/20180926/pdf/43yp0pghpr9bq4.pdf

[Leftfield]

AFR reporting today that MYOB subject to $2.2 bln take-over bid from KKR at $A2.98 per share.

[Malpaso]

Yikes 10% drop in 10 days and still it goes down :ohmy: rather large correction, no doubt off the interest rate discussions in the US and overall tech risk. Apart from that i can't see any other bad news that might be affecting it. Waiting for it to bottom out and then i'm jumping in.....

[longy]

Yikes 10% drop in 10 days and still it goes down :ohmy: rather large correction, no doubt off the interest rate discussions in the US and overall tech risk. Apart from that i can't see any other bad news that might be affecting it. Waiting for it to bottom out and then i'm jumping in.....

I think so too. Love the US or hate US... but more or less we tended to get drag along with Wall St. I am already maxed out with XRO. Where do you see is the bottom?

[Malpaso]

Ummmm well glad I didn't buy when I thought it had reached a low point.... $39 today, that's a 25% drop off its recent high of $52! That's a mini stock market crash right there!!! One thing I have learnt from Xero shares is expect the unexpected and definitely take a long term approach...…..

[Lorne Ranger]

Ummmm well glad I didn't buy when I thought it had reached a low point.... $39 today, that's a 25% drop off its recent high of $52! That's a mini stock market crash right there!!! One thing I have learnt from Xero shares is expect the unexpected and definitely take a long term approach...…..

Yep. I have been in since it was around NZ$2 and saw it float right up to 40 before crashing back to around 15, but it duly made up lost ground, eventually. So yes, quite the ride (but somehow less anxiety inducing that DIL was in its last years!) I dont think the sell off is anything to do with Xero specifically, I think the outlook for ASX stocks is gloomier than even NZ and with the US doing so well and still seemingly underpriced, I wouldn't be surprised if majors are selling off and reinvesting in US giants. Still it's hard to look past topping up at these prices, soon as knife lands.....

[artemis]

Last week, the Sunday Star-Times Top 30 Accounting Firms, sponsored by Chartered Accountants Australia and New Zealand (CAANZ) was announced.

All 30 are Xero partners.

[mikeybycrikey]

I feel like XRO is getting bogged down by Brexit. Every time the pound drops (as it did yesterday because of yet more Brexit chaos), the SP falls. Make this madness stop!

[Toasty]

Back through $50 today. Maybe the madness has stopped. No more small movements for XRO. Its playing in big (insert preferred gender here) boy territory now.

[Toasty]

Xero crossing through $54 on not a lot of news. Keen to see the May 16 results to see if there is anything substantial driving it.

[artemis]

Moving across to the ASX was the right move for XRO. I doubt the price and volumes would be anywhere near on the NZX.

[artemis]

Cool UK TV ad for XRO.

www.xero.com/blog/2019/04/fasten-your-seatbelts-xero-airs-its-first-tv-ad-in-the-uk/

[Bjauck]

Moving across to the ASX was the right move for XRO. I doubt the price and volumes would be anywhere near on the NZX. That’s true. The hollow out of the NZ share market continues. NZ households have smaller pension funds and few share investments - they tend to chase leveraged untaxed capital gains from investment in residential rental properties.

So, many of our companies have headed across the ditch. With no appetite for NZ tax reform, I think that will continue. How much longer before the NZ share market closes and The ASX takes on all NZ based companies?

[Toasty]

Xero results out and looking pretty good I thought. Good to see the progress in the UK and while the US is slow they are growing at good percentages and seem to be gaining momentum. And we appear to be in profit. Looking forward to share market action today.

https://www.xero.com/content/dam/xero/pdf/About%20Us/xero-limited-investor-presentation-fy19.pdf

[artemis]

Certainly sharemarket action today. Looking like sp might hit AUD60.

[Toasty]

Certainly sharemarket action today. Looking like sp might hit AUD60.

And $60 has been reached. Interesting day. Market certainly likes the results. The same sort of acquisition numbers over the next financial year and we are well into the 2.2 million plus subscriber range.

[Timesurfer]

Not bad for a company bleeding $27m a year. I think I have been doing it wrong all these years!

[Leftfield]

Great result for Xero, congrats to all holders!

[winner69]

This guy has a valuation of $28 for XRO

https://www.morningstar.com.au/stocks/article/xero-deep-in-overvalued-territory-despite-str/190207?utm_medium=email&utm_campaign=MII%20-%20Free%20Top%20Stories%202019%20-%20issue%2019&utm_content=MII%20-%20Free%20Top%20Stories%202019%20-%20issue%2019+CID_e8a8f32526dcc01d9cb0831969db8fa2&utm_source=Email%20marketing%20software&utm_term=Xero%20deep%20in%20overvalued%20territory %20despite%20strong%20result

[artemis]

Xero may well be overvalued, for sure, but the many losses so far need to be seen in Xero's strategic context. Which has been growth first, profits later.

[artemis]

Xero SP hitting new records most days atm.

[artemis]

Xero in the US - Fisher Funds view.

Xero’s subscriber growth in the year ended March in the US was 48 percent while overall group growth was 31 percent.

“The cloud accounting software market is huge and is very under-penetrated. We think cloud accounting penetration in that market is less than 15 percent which compares to around 50 percent penetration in NZ,” Dickie says.

http://www.scoop.co.nz/stories/BU1907/S00677/xero-is-a-giant-in-the-making-in-the-us-fisher-funds.htm

[artemis]

XRO is knocking on the door of the ASX50, market cap wise. That would increase demand.

[RGR367]

Go on. Go higher even more and time to realize the dream :t_up:

[pierre]

XRO on a bit of a tear - fantastic to see it hit high today over $68.

[Malpaso]

So how's this for a lost opportunity - Xero had a capital raising offer in 2014 i think - maximum subscription was $15,000 @ about $2.00 per share from memory, so 7,400 shares (which i bought based on Rod's and others recommendation). Share price climbed to $45 per share = $330,000, then tanked within 4 days to $15 share. If one had sold at $45 per share then reinvested the proceeds at $15 per share = 22,000 shares which at todays price $68 = $1,496,000!!! How to turn $15,000 into $1.5m in 5 years. At the time they tanked, I remember Rod saying to just keep them in your bottom draw for 5 years.

I panicked and offloaded most of the shares for about $18. Still a profit however I (try not to) think about what could have been, on a daily basis :(

[macduffy]

I sleep well, knowing that I've never held Xero so have never regretted selling them early.

Ggrrr!

:mad ;:

[artemis]

SP heading for $AUD70. Still a long way behind Intuit and Sage.

[artemis]

Nice result from Xero. Past the 2 mill customers mark, and according to Stuff today "Xero eeks out small profit". Did they think it is still Halloween?

[mondograss]

Nice result from Xero. Past the 2 mill customers mark, and according to Stuff today "Xero eeks out small profit". Did they think it is still Halloween?

That lifetime value is looking very healthy, shows just how much money these SaaS companies can make. Churn is impressively low too. All in all I think that was a good result though subscribers growth in the US is still proving to be hard work. Still they're starting to get growth elsewhere now.

[artemis]

Xero almost made it to AUD80 today - 1 cent off.

[flyer]

Xero almost made it to AUD80 today - 1 cent off.

It did $80.22 close

[Food4Thought]

Well well... up to $100AU is my estimate. Goals goals goals👌

Disc
Not holding

[Toasty]

I have always thought Xero would be an acquisition target for someone like Microsoft or a FANG company that wanted a financial arm. I wonder if anyone will bite before the price goes too far?

[Shore]

Yeah I'd always believed Xero would fit perfectly as a product within the Office 365 suite or Google's small business offering.. would've thought 2m+ money-paying small businesses globally would be a no-brainer. I'm certain one of them must have sniffed around at some point.

[Food4Thought]

I'm wondering if XRO considers PLX. Perhaps gets more interesting for acquisition?

[winner69]

This guy raves about Xero the hero

https://www.smh.com.au/business/markets/global-investment-bank-picks-xero-the-hero-for-2020-20200103-p53om7.html

[RGR367]

This guy raves about Xero the hero

https://www.smh.com.au/business/markets/global-investment-bank-picks-xero-the-hero-for-2020-20200103-p53om7.html

Just live the dream winner69. Remember when others said that XRO was way overpriced then when it was at NZ$33 :cool:

[pierre]

XRO up to over AUD87.00 today - equivalent of NZD90.00+ - sensational!

[pierre]

XRO up to over AUD87.00 today - equivalent of NZD90.00+ - sensational!
Well, that little burst was short-lived. Never mind $100 by Christmas will be fine thanks.

[artemis]

Article in the Herald today about Xero's switch to the ASX. Jenny Ruth: Did quitting the NZX pay off for Xero?

Paywalled (but available on Pressreader).

Article triggered by the launch next month of the ASX All Technology Index, Xero the largest stock.

Long story short - the move was positive. More liquidity, more analysts covering, since the shift trading at a small premium to SAAS peers rather than at a discount.

[Timesurfer]

Party happening on the XRO front?

[ShareFodder]

Party happening on the XRO front?

Will pop some champagne at $100 AUD.

[Toasty]

Over $90 AUD today. Champagne heading towards the fridge to begin chilling.

[couta1]

Over $90 AUD today. Champagne heading towards the fridge to begin chilling. Amazing story right here but buying at these levels would require huge round things, I couldn't imagine even entertaining the idea.

[moimoi]

Amazing story right here but buying at these levels would require huge round things, I couldn't imagine even entertaining the idea.

The same could have been said for the past 3 years...

And yet the chart confirms it has relentlessly kept going up.

Hope every Kiwisaver fund has shed-loads of em

[couta1]

The same could have been said for the past 3 years...

And yet the chart confirms it has relentlessly kept going up.

Hope every Kiwisaver fund has shed-loads of em For sure but I guess it's an individual thing, I take big risks by having a large % of my portfolio in single stocks but I like big profit making companies like A2 and I'm not a tech company lover.

[Toasty]

For sure but I guess it's an individual thing, I take big risks by having a large % of my portfolio in single stocks but I like big profit making companies like A2 and I'm not a tech company lover.

I agree usually but these are a huge percentage of my holdings now just because I was in at 90 cents. At some point it would be nice to convert them to a dividend payer but I am in for the long haul.

[RGR367]

Over $90 AUD today. Champagne heading towards the fridge to begin chilling.

Yeah but wait drinking that after the result is out this year. AU $125 was the target, right :cool:

[longy]

Xero to head $100b 'Aussie Nasdaq' What do you make of this? Sounds like a go go to me. Accounting technology giant Xero will head the Australian Securities Exchange's new technology index to be unveiled today, giving investors the chance to invest in the fastest-growing segment of the market in one trade.

[Timesurfer]

What goes up must come down?
Been hit pretty hard lately. Will businesses no longer need accounting software as a result of the virus or has the heady run just left reality too far behind and we are returning to fair value?

[longy]

What goes up must come down?
Been hit pretty hard lately. Will businesses no longer need accounting software as a result of the virus or has the heady run just left reality too far behind and we are returning to fair value?

I think is more of the case of profit taking actually. I wished I have sold a few @ 89+. But never mind... I made several mistake in the past jumped in and out too many times and were at all of the wrong time too... I think I will ride out the storm this time around and most likely will buy more. It is in my opinion only that I think Xero is no where near peaked.

[BlackPeter]

Given that Xero is a NZ company (though now only ASX listed) and analysed by lots of pristine and no doubt 100% pure NZ analysts decided I to include them in my wee exercise assessing the quality of the predictions of our analysts.

So - how did the analysts do with predicting XRO's performance over the last 12 months?

XRO's shareprice peaked in February 2019 at A$49.05 and analysts (consensus) forecast for February 2020 was A$48.61, which means analysts predicted the SP to slightly (1%) drop over the last 12 months. They have been woefully wrong - the XRO shareprice in February 2020 actually peaked at A$89.00, i.e. instead of the forecasted slight drop of 1% did punters get a 81% rise. A monumental fail for the analysts, but nice for the punters who didn't trusted them and bought anyway :);

Looking into the consensus buy recommendation - it was in February 2019 a strong "HOLD"(5.8/10) - i.e. analysts said that the share will slightly outperform the NZX. NZX went up by 21% and TPW went up by 81%, i.e. XRO outperformed the NZX50 by 60%! This would have been a screeaming buy, not a hold. Nice for holders, but not really a convincing analyst forecast. I call the quality of the forecast a fail.

I am doing this exercise as well with other NZX listed stocks - the overview is here:
https://www.sharetrader.co.nz/showthread.php?11721-How-good-are-the-forecasts-of-stockmarket-analysts

13 stocks checked so far (checking for each consensus and buy recommendation);
Consensus shareprice forecasts correct: 1/13; analyst hitrate: 7.7%
Consensus recommendation vs NZX50 correct: 4/13; analyst hitrate: 31%

[artemis]

Interesting to see Xero recovering and not all that far off its high now. Given the state of the world these days it seems likely that quite a few of Xero's clients will go under and that will impact their outlook.

Maybe their customers are more savvy than the average! Could be.

[winner69]

Interesting to see Xero recovering and not all that far off its high now. Given the state of the world these days it seems likely that quite a few of Xero's clients will go under and that will impact their outlook.

Maybe their customers are more savvy than the average! Could be.

I doubt their customers are more savvy than the average ....but all least Xero customers know when they’re broke faster.

[artemis]

I doubt their customers are more savvy than the average ....but all least Xero customers know when they’re broke faster.

LOL, though would say that a vast number of small businesses do the accounts at the kitchen table with a shoebox of bits of paper. Owners who invest in cloud accounting software are a big step up from that.

[Toasty]

Hi RnT. Still holding. Welcome back. I did sell a very small amount just as the world was imploding recently. Just to have a bit of cash to invest elsewhere. I am amazed how well it has held up and hopefully as this Covid thing passes we will see a return to that relentless climb. Still a big addressable market I reckon.

[Joshuatree]

Mkt doesnt like results atp down re 5%

Investor Presentation - FY20 Annual Results (https://hotcopper.com.au/threads/5395315/)

[pierre]

Mkt doesnt like results atp down re 5%


Nice to see positive numbers on the bottom line, in revenue and subscriber numbers and EBITDA and EBITDA margin.

Probably not the results that are the problem - more likely unhappiness about the vagueness of the outlook for FY21.

I'm currently drafting a budget for my business for FY21 and like XRO really have no idea what to predict the Covid-19 impact will be on the revenue line.

[Jay]

Um pierre - your link appears to go to the ASB login page:confused:

[Jonboyz]

Mkt doesnt like results atp down re 5%
Investor Presentation - FY20 Annual Results (https://online.asb.co.nz/ost/8D2949F80D90E8616EA6A232FD59A2EB/companyannouncements/showannouncement/asx/xro?issuercode=xro&number=541190&ispdf=true)

Methinks mum&dad are realising that the economic shock of the lockdowns are only just beginning!

[pierre]

Um pierre - your link appears to go to the ASB login page:confused:

That was a copy of Joshuatree's original message. He asked me to remove the quote from my comment - which I have now done.

[Joshuatree]

Um pierre - your link appears to go to the ASB login page:confused:

Thanks Jay ive put another link up.

[ShareFodder]

Finally getting back on track and closing in on $100. I tend to think the covid recovery will be a great catalyst for increased growth in cloud accounting and I hope Xero will do well.