Xro - xero

[Copper]

knowing Xero they will let the market know the day after the 200k milestone is hit. expect it soon then!

A figure of 193000 is mentioned with the 102% etc and that was a little while ago.So 200.000 would be where it is now I would think at the rate they are going.

[zs_cecil]

Xerocon USA 2014 maybe... I'm not expecting anything substantial in terms of US number until then!

My numbers might be out of dat ebut last count I had for the US was 11,000 back in March this year. Could argue they may have added another 6,000 so maybe at 20,000 or so? Not sure that kind of number will impress the US folk yet. Wait till next year I reckon! Never know, if they push as hard as they say they will it could be 6 figures...or am I just dreaming ;)

Yeah, even the number 200,000+ is not enough to impress the US folks. US market is so hard to conquer. It just makes me think about another company Pacific Edge. It is just impossible for both CEO of the two companies to give us any indication of the customer numbers at this stage. I can imagine how hard they have been working on this.

By saying this, I start to think if the US market is really the only key to the big success. The current situation gives me a feeling that the US market is the only way to succeed or die (Am I just too nervous?). While it is tackling hard on the US market as its first priority, I would like to imagine Xero could start to think about its plan to position itself and grow in the rest of the world.

[Copper]

Yeah, even the number 200,000+ is not enough to impress the US folks. US market is so hard to conquer. It just makes me think about another company Pacific Edge. It is just impossible for both CEO of the two companies to give us any indication of the customer numbers at this stage. I can imagine how hard they have been working on this.

By saying this, I start to think if the US market is really the only key to the big success. The
current situation gives me a feeling that the US market is the only way to succeed or die (Am I

just too nervous?). While it is tackling hard on the US market as its first priority, I would like to
imagine Xero could start to think about its plan to position itself and grow in the rest of the
world.

You may be and understandably nervous.I read a bit today in I think the NBR where a comment was made by Intuit boss who admitted that Xero has some great ideas and product which has influenced his company . Xero may be small but history has many instances where a small guy is gobbled up by a big guy just to get him out of the way.If Xero was gobbled up we may see 50% or doubling of this share price.That US Xerocon at the Americas Cup on the same day as Intuit ,who has had to put on an alternative competing conference may be a defining time.Punters in ,doubters sell up now and go away....

[Everwood]

Re the 200k customers = Not at Xerocon but saw it on the slides from the photos people were taking. They say they've added 100k in last 13 months.

Do you have a link to the slides photos people were taking? I would be interested in looking at them myself.

[Toasty]

https://www.nzx.com/companies/XRO/announcements/240446

200k + customers up. Australia looks good. No separate number for US.

[Toasty]

Its also interesting to note that they are only just embarking on their first advertising campaign in Australia. So effectively the whole current customer base has been built on Accountants and word of mouth referrals so far. That has got to be an endorsement of that channel strategy.

[Shore]

I think that channel strategy was already proven a long time ago. Their accountants are a walking, talking army of Xero fanatics that can't get enough of it. They're like a cult. Look at xerocon, look at the tweets coming out of there - I mean this is an 'accountant conference', but it's more akin to a revolution. All Xero need to do in the USA is breed that same sort of love amongst the accounting profession over there - then Intuit will have a bit of a mountain to climb. I mean MYOB and Reckon must look at what's going on at Xerocon and wonder how on earth their brand & products could garner that level of passion and excitement - it must seem like an uphill battle.

[Copper]

And there's your 200K announcement, right on que. Rod is like an open book :)

Moosie ... The old subject. Another 50 cents on the share price and your charts may become a bit starry eyed. Am I on the right path.
Cheers....

[Toasty]

$16.50. I guess the market really likes the 200k customer number.

[CJ]

$16.50. I guess the market really likes the 200k customer number.Not sure why. That level of growth is expected. Will be interesitng to see if they announce US numbers as the US XeroCon.

[Copper]

should be back up to $18 in short course as tgat was the target price for 200k customers

Has to be Aussy buying after all the drinks yesterday.

[CJ]

Has to be Aussy buying after all the drinks yesterday.
Looks like hung-over Aussies buying - not the price didn't pick up that much till mid morning ;)

[LiKaShing]

I was lucky enough to sell at $17.90 and bought back in $15.4 on tuesday ;) just before Xerocon.

[Shore]

I don't think it's anything to do with the 200k (well it's probably a little), but rather I think it's the accountant community in Australia getting behind Xero and wanting to own a piece of the action. I think the Xerocon simply solidified the product and direction to that captive audience and understandably they want to be part of the journey, rather than simply just selling it to their customers.

[Shore]

That's the unknown quantity I'm afraid... I believe what you are seeking is... a crystal ball!

In all seriousness it depends on what Xero announces there, and I don't mean in terms of US numbers because we all know they're next to nothing right now, but more in terms of maybe Payroll for USA or other USA dependent features that will get investors excited on that side of the Pacific. I'm pretty sure that Xero will be saving a good announcement or two for Xerocon USA simply to kick off with a bang and try and get some momentum, so I'm betting on a favorable SP rise during and immediately after the conference.

That's my completely and utterly random advice based on absolutely nothing at all. :)

[CJ]

They are working on US payroll - whether they can announce the roll out in time for the USCon is another question.

Does make you wonder though - if the share price was pushed up by accountants while away at a conference, how much time did they take to investigate/calcuate fair value - Accountants are meant to be conservative, not impulsive!

[zs_cecil]

Yes, I agree. So what I wanted to clarrify was the increase in SP post Xerocon OZ - $2? If so, and if everyone agrees the SP rise was mainly, if not all to do with the reasons you outline above, then think what Xerocon USA will add to the SP.....

The Xerocon USA will probably grab attentions from the accounting industries and let people know that this is such a great product as well as investment opportunity for them. :eek2: But I guess the share price will probably be not affected because investors in US may have limited way to put their money in.

[zs_cecil]

They are working on US payroll - whether they can announce the roll out in time for the USCon is another question.

Does make you wonder though - if the share price was pushed up by accountants while away at a conference, how much time did they take to investigate/calcuate fair value - Accountants are meant to be conservative, not impulsive!

That's true. Accountants are very careful about numbers. But what if they feel incentive to buy the shares. The more customers they convince to use Xero, the more increases the share price will have. :t_up:

[Shore]

Does make you wonder though - if the share price was pushed up by accountants while away at a conference, how much time did they take to investigate/calcuate fair value - Accountants are meant to be conservative, not impulsive!

Your old traditional accountant yes - but not so much this new breed coming in. This is why I think Intuit and MYOB and Reckon and the old guard are done for, because they simply don't appeal to the new generation. Look at the link below... do those people fit your traditional view of an accountancy practice? Probably not - but this is the new world we live in, and Xero fits into that vision.

http://www.interactiveaccounting.com.au/about-us/team

[Copper]

[QUOTE=Shore;425453]Your old traditional accountant yes - but not so much this new breed coming in. This is why I think Intuit and MYOB and Reckon and the old guard are done for, because they simply don't appeal to the new generation. Look at the link below... do those people fit your traditional view of an accountancy practice? Probably not - but this is the new world we live in, and Xero fits into that vision.

I repeat what I posted the other day about a US poster I think who said that although the share price was weak at the time you would not want to be out of this stock when they take on the US at the Americas Cup Xerocon.If the psyched up Aussies can put on $2 then anything may happen if all goes well in the US.Someone mentioned it is like a cult following.

[Copper]

You mean because there isn't a US based exchange listing? Yeah you might be right there. That might be fair in relation to the majority of the average accountants, but I suspect the big accountancy firms will find ways to invest if they want to. Will be interested to know if any investment firms attend Xerocon as well, anyone know?

If I am right on your thinking,there is no problem of a US shareholder buying thru an Aussy or NZ broker direct or thru an American broker with agent or office in Aussy or NZ.Same as us buying shares in Aussy.Mostly get held in nominee coy somewhere.

[CJ]

If I am right on your thinking,there is no problem of a US shareholder buying thru an Aussy or NZ broker direct or thru an American broker with agent or office in Aussy or NZ.Same as us buying shares in Aussy.Mostly get held in nominee coy somewhere.A bit more difficult but definitely do-able - XRO got a big lift of the ozzy XeroCon even before they were listed on the ASX.

[winner69]

You know things are on a roll when the press starts raving that 200000 is a fifth of a way to a million customers .....surprised they didn't say nearly a quarter of the way to a million

Exciting times ... Jeez a million customers ..... Share price 300 bucks?

[Copper]

You know things are on a roll when the press starts raving that 200000 is a fifth of a way to a million customers .....surprised they didn't say nearly a quarter of the way to a million

Exciting times ... Jeez a million customers ..... Share price 300 bucks?

Looks like the laggards from Xerocon Aust in market again. Same timing.

[bobxia]

from memory, at a price of $6.5, it's pricing 1 million customers in 5 years time. so the current market is predicting (or hoping) 3 million customers in 4 years, or may be 1 or 2 million next year or the year after....

[bobxia]

yes, some reports I saw last year (when the price was around 6.5), forgot from whom...so now 1 year passed(4 years left), the current price is about 3 times of 6.5, and therefore it's about 3million customers. i know this is not very scientific calculation, but just to give you a feeling..

[zs_cecil]

Article in stuff about Xerocon USA (http://www.stuff.co.nz/business/industries/9121954/Xero-showcases-Kiwi-software-in-US)

Can we consider this is the Round 1 fight in US between Xero and Intuit? I don't know why I kind of feeling very exciting to see two companies on the battle field.

[Toasty]

This is actually a big reason why I invested in Xero. It was the thought that it might actually be realistic to consider global domination rather than remaining NZ centric. I might incur the wrath of real investors by having this as a methodology but it has been an awesome ride. I didn't even really invest that much proportionally, its gone from about 20% of my portfolio to about 92.7% and I've sold down at various points.

I am still constantly surprised that it has gone as far as it has.

[Copper]

Article in stuff about Xerocon USA (http://www.stuff.co.nz/business/industries/9121954/Xero-showcases-Kiwi-software-in-US)

It will be interesting to see if there is any buying from the US after the start of Xerocon US.Currently 40,000 odd at 18 dollars for sale which is a large number all at once.Usually takes a day or so for US buyers to appear.

[Copper]

So much for that 40,000.......

[Shore]

You're forgetting about Xerocon UK in a few weeks too! The last Xerocon over there was very successful and the UK accounting partners are very passionate about it too.

[Toasty]

Worth watching the blogs of US accounting commentators over the next few weeks to see if there is heightened awareness of Xero and what they think of it.

If we are up to $70ish million annualised revenue now then I would have thought that based on current growth forecasts, $100 million revenue should be achieved next financial year. I wonder if heightened awareness plus that key revenue means NASDAQ listing in the next couple of years? Does this also mean they would delist in NZ and AUS?

[CJ]

This one is an absolute no brainer!Yip - no brains, just faith.


Does this also mean they would delist in NZ and AUS?I think they would dual list first given Rod has built this up as a NZ company. That may change over time based on number of NZ shareholders etc. This is different to DIL where I think they will just ditch the NZX listing.

[CJ]

Haha, hey if faith gets you +2150% in less than 5 years and an extra 16% on the side in the last 2 weeks then faith it is!!I'm not sure if I lost my faith or lost my mind when I sold. ;)

[CJ]

No thoughts about getting back in on the last dip prior to Xerocons?I did. Money tied up. I would also like to see progress in the US rather than rely on faith. Having said that, that will probably be to late so you need to rely on the fact they will execute to plan (which they have done to date).

[comatose73]

A couple of announcements from XeroCon SanFran - a new US specific payroll module and the first US bank feeds
http://www.accountingtoday.com/accounting-technology/news/Xero-Execs-Tout-Product-Offerings67962-1.html
Both of these seem pretty significant in the context of the US market.
Also like the comments from Rod about needing to work on branding and building awareness - indications of the start of a marketing drive perhaps?

[comatose73]

And the press release re bank feeds on WSJ http://online.wsj.com/article/PR-CO-20130904-905054.html

[lastmoa]

And the press release re bank feeds on WSJ http://online.wsj.com/article/PR-CO-20130904-905054.html

Thanks for the two USA links, Comatose73.
Yes, exciting times as Xero presses into USA. I noticed there XeroCon was the same date as Intuit - bit more than coincidence there. Good to see the Goliath appreciating the disruption Xero could perform to the industry. I do not see this as a 'winner takes all' .... to achieve its BHAG remember Xero just needs 1mill customers.
Pleased to read they are very close to US Payroll release and working with local banks there too.
Excetional time to be touting a NZ company and its potential to disrupt - with the America's Cup finals in play.
Disc - holder, and buyer.

[Toasty]

http://www.nbr.co.nz/opinion/ird-cloud-lifts-xero-myob-ck
Good news about the IRDs approval of offshore data storage. The article appears to suggest that MYOB applied at the same time but have not yet received the sign off...?

http://www.sleeter.com/blog/2013/09/xero-xerocon-2013/
What looks like a fairly impartial sort of review of the San Francisco Xerocon and upcoming Xero features for the USA.

Theres all sorts of bits and pieces about what various attendees got out of the conference but it seems overwhelmingly positive from what I can see. Certainly the latest Stuff article seems to indicate that Xero think so.
http://www.stuff.co.nz/business/industries/9149273/Buoyant-Xero-seeking-100-staff

I await the share markets response....

[blackcap]

[URL]http://www.stuff.co.nz/business/industries/9149273/Buoyant-Xero-seeking-100-staff

I await the share markets response....

100 extra staff also adds $100,000*100 = $10,000,000 to the cash drain per annum :P ;)

[swillisam]

Xero is going from strength to strength. I really like the company and what they are doing. I looked at investing in them way back when the share price was around $2.75 however I couldn’t due to my job.

Now at $18ish I do wonder how high the price will go. Seems to be going up and up. Where is that price ceiling?

[Toasty]

100 extra staff also adds $100,000*100 = $10,000,000 to the cash drain per annum :P ;)

Good point. As a seasoned investor I tend to use the FIE approach on these types of insights (fingers in ears..la la la...)

Or alternatively the extra developers will add the functionality that makes the offer more compelling for the US markets and customer volumes will increase exponentially. I am assuming that once critical mass is achieved that a fair few developers will found themselves out of work thus saving a few $$$.

[Everwood]

If Xero starts to make good inroads into the United States over the next 18 months, it would not surprise me in the least if Intuit or someone else will make a takeover offer.

[Toasty]

If Xero starts to make good inroads into the United States over the next 18 months, it would not surprise me in the least if Intuit or someone else will make a takeover offer.

I will let them have mine for $30 a share. This would help me struggle on with life. The 20" wheel options on porsches are getting expensive but you have to have the necessities.

[Everwood]

I will let them have mine for $30 a share. This would help me struggle on with life. The 20" wheel options on porsches are getting expensive but you have to have the necessities.

$30 would be nice, but I’m hoping for at least $40 per share. The first thing I would do is pay of the mortgage, then head over to Sydney to buy my first Chanel. Then reinvest the remaining amount. (Dreams can come true)

[Shore]

I hope it doesn't end with an Intuit takeover at $30-40 per share. Xero has so much more potential to fulfill as a global small business leader (as opposed to just online accounting). Online accounting is simply the hub from which it can branch out in so many directions and be a vital resource to any small business starting up, anywhere in the globe. Before long it'll be one of those things a business does: set up a company, get a domain name, sign up to xero.. etc. Intuit taking over at this early stage (and I mean early) of growth is not in shareholder's best interest (IMHO).

[Toasty]

Why would anyone want to buy an old SQL solution with a Javascrpt HTML front end. You would only buy if you had nothing new in the R&D department becuase Fibre is going to slowly change the game and like buffet says buy what you understand... Yes they may sell for 40 dollars a share but only if they have no R&D and dont understand the future and management often has no clue about the future...Its still a cheap stock becuase we just blew the amaricans out of the water at SF... Americans are often not the drivers of new technologies anymore.. Just look at samsung using linux and googles Java mobile runtime.. Its all how well you market.. The lastest Java classes for Andriod is now called "KitKat" but its still "Java" no matter what flavour of choclate you want to call it... So Java just blew Object c "Apples compiler" out of the water for smart phones.. An example of an older technology being re packaged for the consumer with ice cream and choclate topping...

Not sure where you are coming from here Steve. On one hand you say that no one would buy the company because its based on old technology then you say that old technology can still win if its disguised and marketed effectively to its target audience? Then you say its cheap because we beat the Americans in a yacht race. Is that comparison made because the NZ boat is perceived to be pretty agricultural tech?

I still take the view that the market doesn't care what technology the product is built on but that it satisfies their need. And the need is that accounting and businesses processes are made easy, enjoyable and understandable. All things that Xero brings to the table.

[Hawkeye]

My rough numbers tell me we are about $3 up per share post Xerocons. That's roughly a 20% gain in less than a month.... I'm guessing we see new highs soon enough. Imagine what Xerocon 2014 will do to the SP once XRO is on the Nasdaq ;)

Have they confirmed they are listing on the Nasdaq? I missed that news

[luigi]

Rod has indicated that they would need to get to $100m revenue first - if they continue to double revenue year-on-year then this could occur late 2014.

http://www.stuff.co.nz/business/industries/8439583/Xero-Nasdaq-listing-talk-little-early-Drury

[winner69]

NBR has another piece on xRO, including reference to that Fortune piece on Inyuit v Xero

[Stranger_Danger]

My rough numbers tell me we are about $3 up per share post Xerocons. That's roughly a 20% gain in less than a month.... I'm guessing we see new highs soon enough. Imagine what Xerocon 2014 will do to the SP once XRO is on the Nasdaq ;)

If you are remotely serious, then this isn't investing as I know it.

Sheesh, why don't they just have a conference on the moon? Imagine what that would do.

[Stranger_Danger]

Clearly people are divided on XRO, and I get why. Everyone will make their own mind up whether or not XRO is for them. I assume it's not your cup of tea Danger? or do you hold a position on XRO as well?

Nope, no XRO shares here.

I like a lot of what they're doing, and am not down on the company - just the valuation.

Frankly, it is the sort of company I would buy at a price in theory, but it has never been close to a buy for me.

Remember, they only had a million or two of cash left in the kitty when Winkler bought in - this has been a high valuation, high risk ride all the way. It could easily have gone broke in other hands - management really has done it well.

I sort of accept missing out on XRO as a function of my personality. In hindsight, great money has been made here, but, we all have to invest to our style, in the moment.

At every moment, it hasn't met my investment criteria - frankly, most of the rationale from day one has been faith, and that is fine if faith is your thing, and it has definitely been rewarded. Maybe the faith is not misplaced in this case?

For me, I know if I'd have faith in this one, I'd have to offset my profits with the ostrich farms, finance companies, tax based forestry schemes, loss making mining companies and ex wives that I'd also had faith in.

I guess faith just isn't my thing!

[Dentie]

Nope, no XRO shares here.

I like a lot of what they're doing, and am not down on the company - just the valuation.

Frankly, it is the sort of company I would buy at a price in theory, but it has never been close to a buy for me.

Remember, they only had a million or two of cash left in the kitty when Winkler bought in - this has been a high valuation, high risk ride all the way. It could easily have gone broke in other hands - management really has done it well.

I sort of accept missing out on XRO as a function of my personality. In hindsight, great money has been made here, but, we all have to invest to our style, in the moment.

At every moment, it hasn't met my investment criteria - frankly, most of the rationale from day one has been faith, and that is fine if faith is your thing, and it has definitely been rewarded. Maybe the faith is not misplaced in this case?

For me, I know if I'd have faith in this one, I'd have to offset my profits with the ostrich farms, finance companies, tax based forestry schemes, loss making mining companies and ex wives that I'd also had faith in.

I guess faith just isn't my thing!


Thanks Stranger, I thought I was alone! My post from another thread ...

"Xero certainly appears to be growing everything on an exponential basis: customers, revenue, cash in the bank & its annual losses ....ummmmm something is not conducive with the other!! Thank goodness it has shareholders with deep pockets."

This is certainly not "investing" ...it is tantamount to "gambling" in my humble view.

Most of the shares are/were held by a select few ...who only released them to carefully selected recipients who had very deep pockets. The daily volume for ages was below 50k because the balance were being held by the selected few.

Can't wait to see the profitability figures once they hit the 1m customer.

(Now I'm off to keep my head below the parapet......)

[Schrodinger]

I noticed growth rates had slowed. We should watch with interest to see if it was just a pause before another spurt. Not sure what the tipping point for accounting software is but a 20% market share of Intuit's is very large business for Xero with further potential for international expansion. Saas can be a great model for market deployment if done correctly.

Of particular interest is the chance of a takeover or merger.

If everything goes Xero's way we could be looking at a very large NZ business.

[CJ]

I noticed growth rates had slowed. Slightly. But if they pull the US off, and we should see within the year now that they have started ramping up over there, then it should take off again, and get another boost in the US when they add payroll.

NZ and Aust, growth will naturally slow but UK has been a bit disappointing though they have shifted their focus to the US.

[Schrodinger]

What they need is that key break in the US market.

It could be a "tipping point" event that puts Xero in the customers minds and then its a foot race between the two options.

Not sure how to do it in such a large market. Maybe state by state.

[Schrodinger]

From what I read it is an accounting distribution model. I guess it is getting enough accountants to switch over.

Having Theil pulling the strings in the background is very important.

[brucea]

Hi guys - is it likely that Xero will do a 2 for 1 share split given the price per share is so high? Maybe this question has been asked before?

[CJ]

Hi guys - is it likely that Xero will do a 2 for 1 share split given the price per share is so high? Maybe this question has been asked before?For NZX they may but if aiming for NASDAQ, they may not since they are use to prices above $10.

It adds liquidity but shouldn't in theory impact the investment.

[brucea]

Thanks CJ - I had forgotten about the issue of NASDAQ; I bought my initial 18,000 Xero shares some years back at an average price of $1.46. Am facing redundancy in two months time, so they are an important part of my nest egg. I had hoped to make my fortune with either BLT, RAK or SNK ... but enough said!!

[Toasty]

all time high about to be hit today. $20 is the next target. wow is all I have to say!

Its not too late Moosie. If you buy in at $18.90 now they could be worth $18.92 before you know it.

[Lorne Ranger]

Minor deflation to not finish on a high, someone sold out down at 18.82, but still looks good for the rest of the week. Clouds starting to clear, so to speak.....

[baller18]

Wow there is nothing stopping this rocket!!

[Toasty]

Wow there is nothing stopping this rocket!!

Nope. Nothing can go wrong because its different this time... I love saying that it never gets old.

Hopefully the only thing that will stop it will be intuits $100 per share take over offer....

[Toasty]

$19 and not really trading on any news that I can see. Just a steady upward progression of the share price. Increased awareness in the US of a comparatively low value stock with considerable upside potential if a listing on the NASDAQ becomes a reality?

[Hawkeye]

Newbie question... If xero lists on the NASDAQ, and everyone starts trading there.... and several years down the track the NZX listing is removed, what happens to those holding NZX shares?
This is the first company I have invested in that has hinted at a NASDAQ listing and so I have not had to ponder these questions before.

[lastmoa]

$19 and not really trading on any news that i can see. Just a steady upward progression of the share price. Increased awareness in the us of a comparatively low value stock with considerable upside potential if a listing on the nasdaq becomes a reality?

I think not IF but WHEN

[zs_cecil]

at growth of 80% or so we'd be looking at mid 2014 I'd say, but with much speculation to come in the run up... And as I type I note $19 has been hit and the next sell order is at $19.24.

I wonder how long it would take for an oversea company to prepare a listing on NASDAQ. If it takes long (Let's say a year), I guess Xero could announce it much earlier before its cash is running out.

[CJ]

I wonder how long it would take for an oversea company to prepare a listing on NASDAQ. If it takes long (Let's say a year), I guess Xero could announce it much earlier before its cash is running out.

If it was just a compliance listing, it wouldn't take long at all. Plus they could easily raise funds from deep pocket investors if the Nasdaq listing was imminent.

[Everwood]

The first day they appear on the NASDAQ, I will be getting up early hours in the morning to see how well they do. Hopefully Rod will ring the bell.

[zs_cecil]

If it was just a compliance listing, it wouldn't take long at all. Plus they could easily raise funds from deep pocket investors if the Nasdaq listing was imminent.

I personally prefer Xero raises funds from deep pocket and high profile investors instead of listing on NASDAQ. If a deep pocket and high profile investor is willing to put money at $20 a share for example, I can see it as a justification or enhancement to the value of the company. While hanging Xero on the US share market can be much more volatile, anything can happen.

[Dentie]

New high just hit ;) $18.95

Still interested in Danger and Denties replies as well.....

Sorry Turmeric - missed this momentarily ... due to the non-slothful speed of posting in this thread. I still gotta keep holding down an income (for now at least) while the rest of you lot just keep selling your XRO shares to live...:t_up:

I am certainly "invested" into PEB and am very happy to wait for its day in the sun. I don't believe it is a double standard though Turmeric. The difference is, when PEB has 200,000 customers and $90m+ in the bank - it will have been generated by good old fashioned earnings from a healthy sales turnover... NOT simply by carefully selected shareholders biffing in more and more cash. They will also have a positive NPAT on the bottom line - not a massive loss.

Learner or not - I do not change my belief that I would feel like a gambler if I put even 1 cent into this company. All credit to those who have the balls to participate in the lolly scramble though - well done! When you're cashed up, how about coming and investing in PEB?

I sometimes dream about what the SP of PEB would be if they had Rod doing the sales talk....then I wake up!

[randoman]

The first day they appear on the NASDAQ, I will be getting up early hours in the morning to see how well they do. Hopefully Rod will ring the bell.

That would be so cool!

[Everwood]

And just finally, for those that thought Xerocon was where it stopped - Xero is about to go on it's US roadshow. 20 cities in a month taking Xero to the rest of the USA ;) Starts Oct 21 in Baltimore stopping of in the likes of NYC, Boston, Chicago, Denver, Dallas, Miamim and Ends on Novemebr 21 in Honolulu.

Heres the link for anyone interested:

http://www.xero.com/us/roadshow/

They are also hosting Xerocon event in the UK next week.

[lastmoa]

Aplogies if this has been posted already, but I have only just gotten around to reading now.

Xerocon USA 2013 - a grat debut! (http://blog.xero.com/2013/09/xerocon-usa-2013-a-great-debut/#more-37469)

Worth a read!

I assumed that anyone serious that invested in Xero would pay attention to the blog they have. Makes good reading and gives an understanding of the story as it unfolds.

[baller18]

And just finally, for those that thought Xerocon was where it stopped - Xero is about to go on it's US roadshow. 20 cities in a month taking Xero to the rest of the USA ;) Starts Oct 21 in Baltimore stopping of in the likes of NYC, Boston, Chicago, Denver, Dallas, Miamim and Ends on Novemebr 21 in Honolulu.

Heres the link for anyone interested:

http://www.xero.com/us/roadshow/

That's impressive, man but 19 dollars seems so high to get in at the moment, hmmm...
But man 500,000 customers doesn't seem far away

[Copper]

Just trying to post some useful /interesting links for those that aren't already invested in XRO mate. I assume this thread is not soley made up of participants who are already XRO shareholders, and therefore people who may not read the blog or other pertinent articles/stories out there...

Many tks Turmeric for the links. Had missed the best one previously.
Kind regards....

[lastmoa]

Just trying to post some useful /interesting links for those that aren't already invested in XRO mate. I assume this thread is not soley made up of participants who are already XRO shareholders, and therefore people who may not read the blog or other pertinent articles/stories out there...

True Tumeric, and I am sure everyone appreciates your informative posts, me included. Keep up the good work.

[lastmoa]

[QUOTE=dellow;428257]True Tumeric, and I am sure everyone appreciates your informative posts, me included. Keep up the good work.

Concur with your comments re - SP being too high at $19. Yes, have seen similar comments when SP was $3, $5, $7 ... and sure we will see same comments whatever levels north, it reaches. Yes, if the story continues, and they make good traction in USA, the current price will seem a bargain. I think there 1million customer aim is conservative and I feel they have the right team in place to do this. Exciting times ahead.

[lastmoa]

For sure. I have heard Drury say on multiple occassions the 1 million figure is just something for people to put at the top of their spreadsheets. At this point I blieve 1 million customers is just a step in the direction Xero are headed.

Like the book, Good to Great, says, great companies need to put out a Big Hairy Audacious Goal. When Xero announced there BHAG it did seem audacious to me .. but know it seems very realistic. Time will tell but it is good to see that there roadmap seems very calculated.

[CJ]

For sure. I have heard Drury say on multiple occasions the 1 million figure is just something for people to put at the top of their spreadsheets. At this point I blieve 1 million customers is just a step in the direction Xero are headed.Agree - it is a milestone though it may be a point where growth rates need to be reassessed - you cant double indefinitely.

Having said that, they have a great slide which shows the market penetration needed for 1m. Basically if they can get to 1m at the current rate, they will shoot well beyond that mark as it is only a dip in the ocean. I think US was less than 5% of the SME market.

[CJ]

This is the slide we are talking about for anyone that is interested:
4834That's the one. I was going to say less than 1% but didn't want to get ridiculed.

[baller18]

That looks real achievable.. less than 1% market share in the states and UK and they could reach one million! Wow!!! Congrats to holders, there is nothing stopping this rocket!!!

[lastmoa]

That looks real achievable.. less than 1% market share in the states and UK and they could reach one million! Wow!!! Congrats to holders, there is nothing stopping this rocket!!!

4% in UK - 1% in USA.
Good to see some people here entertaining the thought of 'what if Xero' does reach its target ..... lots to do yet so lets 'Keep Calm and Carry On'

[Shore]

Xero heading to $20b...?

http://www.quickbooks-blog.com/2013/09/intuit-quickbooks-vs-xero-stock-price-xero-wins-big-intuit-deathwatch-4.html

[Everwood]

Xerocon starts tonight in the UK. I wonder if it will have any effect on the stocking price over the next 2 to 3 trading days.

[Everwood]

Xero heading to $20b...?

http://www.quickbooks-blog.com/2013/09/intuit-quickbooks-vs-xero-stock-price-xero-wins-big-intuit-deathwatch-4.html

Hopefully within the next 1 to 2 years we will get better idea how much market share they are taking away from Intuit. It would be fantastic for New Zealand Company to worth that much.

[baller18]

Xero heading to $20b...?

http://www.quickbooks-blog.com/2013/09/intuit-quickbooks-vs-xero-stock-price-xero-wins-big-intuit-deathwatch-4.html

Whoa... 20billion would mean a SP of $200 whoaaa... sure makes $20 dollars very very cheapp...

[zs_cecil]

Whoa... 20billion would mean a SP of $200 whoaaa... sure makes $20 dollars very very cheapp...

"Xero is well on its way towards exceeding Intuit's $20 billion market cap." gives us a lot of imagination.

[Toasty]

That guy has written a whole series of articles on this. Seems pretty vitriolic against Intuit. Makes for nice reading though as long as you don't get swept away by it.

[zs_cecil]

That guy has written a whole series of articles on this. Seems pretty vitriolic against Intuit. Makes for nice reading though as long as you don't get swept away by it.

He must have bought some Xero shares ......

[Toasty]

He must have bought some Xero shares ......

Given his attitude you would think so but he has a disclaimer saying that he doesn't invest in anything he writes about.

[lastmoa]

I'm a long-time Xero holder .. and NOT a seller at these prices.
Whilst it reads good we do have to remain grounded and wait for the USA developments and figures to roll out to get a good indication of traction there versus this incumbent.
Good for people to start entertaining the possibilities that may occur if the stars do align nicely.

[Bing]

http://www.pcworld.com/article/2049267/intuit-revamps-quickbooks-online-for-ease-of-use-mobile-devices.html

Intuit revamps Quickbooks Online for ease of use, mobile devices

[Toasty]

Those do look like some very positive signs. UK was a bit of a bugbear for them initially so maybe over that hurdle now? Who is the main competition over there?

[CJ]

They are doing better than TNZ at least - how heartbreaking has the last week been? Quite possibly the most agonizing sporting event I have ever watched. At least in Rugby it's all over in an hour or so. This has been painful day in day out for bloody ages it seem :( Feel so sorry for the guys - they had all but won the cup and now it would seem it's gone...OUCHAt least with Rugby, when the score was 8-7, we could just play for time.

[lastmoa]

Those do look like some very positive signs. UK was a bit of a bugbear for them initially so maybe over that hurdle now? Who is the main competition over there?

Sage is the main player there.

[lastmoa]

Growth is not fantastic but growth is still growth and they are still adding customers at an increasing rate, all be it ever so slightly. Arguably the better news is having the 1,200 partners including 40 of the top 100 accounting firms on board.

They are doing better than TNZ at least - how heartbreaking has the last week been? Quite possibly the most agonizing sporting event I have ever watched. At least in Rugby it's all over in an hour or so. This has been painful day in day out for bloody ages it seem :( Feel so sorry for the guys - they had all but won the cup and now it would seem it's gone...OUCH

Numbers building there in UK. Good to see. Apart from numbers reported I did like the apointment of an Intuit Manager :
New UK team appointments:

- Sharon Chancellor-Maddison – Marketing Director. Sharon has been Marketing Director at Iris Software Group and a Senior Marketing Manager at Intuit and also has a background in the banking sector stretching back 10 years. She is experienced in large-scale marketing initiatives and will be responsible for UK marketing strategy and execution.

[Toasty]

Gotta love the market. We are doing well in the UK! Price drops by 30 cents...

[Shore]

This is great news to be honest, because the UK is a whole other level compared to Australia. It's a huge, huge market far away from the familiarity of the NZ/Aussie scene where it faces stern competition not just from incumbents there but other agile cloud competitors. So for Xero to show signs of picking up the pace and winning over the accounting channel bodes very well I think for their US ground attack. I'm very encouraged by this, especially considering the UK was arguably it's weak point until now.

[bobxia]

Numbers building there in UK. Good to see. Apart from numbers reported I did like the apointment of an Intuit Manager :
New UK team appointments:

- Sharon Chancellor-Maddison – Marketing Director. Sharon has been Marketing Director at Iris Software Group and a Senior Marketing Manager at Intuit and also has a background in the banking sector stretching back 10 years. She is experienced in large-scale marketing initiatives and will be responsible for UK marketing strategy and execution.


not sure if this is a good news. apparently she didn't do a good job when she's in Intuit.........

[bobxia]

just never see any smart marketing strategy from Intuit to stop Xero grabbing US customers : )

[lastmoa]

not sure if this is a good news. apparently she didn't do a good job when she's in Intuit.........


A defection from the incumbents, MYOB and now Intuit ... all bodes well for what the thought is looking ahead. imho

As for your 'never seeing any smart marketing strategy from Intuit to stop Xero customers' comment - assume your reasoning here is a joke.

[Everwood]

New Zealand based rival Xero was in London this week to outline its plans for the UK accounting software market, Sage's key strength. Analysts at Morgan Stanley issued an underweight rating on Sage after hearing what Xero had to say:

http://www.theguardian.com/business/marketforceslive/2013/sep/25/sage-competition-concerns-xero

[lastmoa]

New Zealand based rival Xero was in London this week to outline its plans for the UK accounting software market, Sage's key strength. Analysts at Morgan Stanley issued an underweight rating on Sage after hearing what Xero had to say:

http://www.theguardian.com/business/marketforceslive/2013/sep/25/sage-competition-concerns-xero

Thanks Everwood. A good article. Interesting stuff from MS.

[bobxia]

nice result, oz & us numbers are very encouraging!!!

[CJ]

Paying customers

As at 30 Sept 2013 As at 30 Sept 2012 Year on year change
________________________________________
New Zealand 85,500 57,300 +49%
________________________________________
Australia 79,100 32,500 +143%
________________________________________
United Kingdom 30,100 15,100 +99%
________________________________________
United States/Rest of World 16,600 6,900 +141%
________________________________________
Total 211,300 111,800 +89%
________________________________________
First up - what the hell does 'Bango' mean.

NZ growth slowing but if it continues another year, will get to their NZ target. The other markets are still a few years off:

http://www.sharetrader.co.nz/attachment.php?attachmentid=4834&d=1379475232

[lastmoa]

First up - what the hell does 'Bango' mean.

NZ growth slowing but if it continues another year, will get to their NZ target. The other markets are still a few years off:

http://www.sharetrader.co.nz/attachment.php?attachmentid=4834&d=1379475232

Rome wasn't built in a day. We all hopefully knew the markets outside NZ will take a few years to reach their targeted market share. Looks to me that the Big Goal of 1million customers is on track and the achieving this in first market (NZ) will be a tick in the right box. Australia should follow a year or so afterwards. imho.
Revenue figures moving nicely higher to point to a US listing, like has always been on the cards. US rollout (and UK) seem to be going well. All in all, I am comfortable with the continuing story.

[CJ]

Dellow - definitely on track - its just a matter of how long. Just comparing actuals with targets so people can work out the timeline. Still just over a 1/5 of the way but US should start to ramp up soon after their launch there.

Interesting that the cash burn was $13m in 3 months which means they only have 1 years cash at that rate. I wonder if staff costs will level off now or if they are still trying to ramp staff numbers?

[Shore]

I think timing is looking good... I predict NASDAQ in 18-24 months and hopefully by then the US numbers will be under steam and more meaningful. I really think the US listing will be the turning point for this stock because it will then be compared to its contemporaries (salesforce, workday, netsuite etc) rather than the stalwarts of the NZX, and I think Xero will do more than hold its own compared to those SaaS giants.

[CJ]

Yes I wonder what the plan is?I have no fear that they wont be able to raise more cash, so that s not an issue. Its just how do they choose to do it. A SPP so small investors can take part or limit it only to big investors like they did last time with a placement to VC firms. Will the founds take an opportunity to cash out a small chunk again.

Personally it was disappointing they didn't do a SPP last time for small shareholders to top up on as they had done that following previous capital raisings.

[Everwood]

They announced on 30th August they now have 200,000 customers. Xero has now added another 11,300 customers in 31 days. Customer acquisition is slowly getting faster.

[Shore]

Yeah I just ran the math on that too and it seems the pace has picked up there somewhat.

[Shore]

Well I heard somewhere they were adding customers in the order of circa 250 per day.. but those new numbers suggest over 350 per day.

[Lorne Ranger]

Certainly the absolute increase in customers YoY is increasing. The growth in customer numbers is slowing somewhat though; over the last 4 half year reports YoY customer growth has been 117%, 118%, 101% and now 89% in this last report. Still pretty damn fantastic though.

I'd be a little weary about extrapolating anything from two adjacent monthly data points. I think you get a better sense of the big picture looking at data over a longer time frame...

Thats one way to look at it, and fair enough. But I think in context, that the NZ market is starting to saturate a little, I wouldn't worry about slowing growth. the keys for me are a doubling of UK, Australia alight, and v encouraging ROW growth. I think its a timing issue that sees a tiny dip in growth rate, but with such impressive revenue growth, and key markets showing the right signals of take-up, it's all smiles in this household.

Rod for PM!

Ranger

[Lorne Ranger]

should be good for the next ten years, after that fibre will change the many markets and other high speed access making high end products easy to deliver on the cloud.. then the games changes again...

I would suggest there is more to having a successful company than just having a fast connection. You still need to have a leading product, brand awareness, client loyalty, good customer service, reliability etc etc. But if you think speed alone makes a difference to how people monitor thier accounts then who am I to argue. It will make video a lot more viable I know that much, but short of having a video guide to help you do the book keeping, Im not sure yet how UFB can help this product more than broadband can. And Broadband doesn't seem to be holding back customers so far.

Or were you being satirical?

[MAC]

The main reason why I have not invested in XRO has been simply that I’ve not had good long distance vision of the fundamentals, there are a lot, and a very wide range, of possible forward profitability scenarios. I’ve tended to err on the side of caution and to not invest in stocks unless I can confidently perform thorough FA on high probability outcomes and assess both risk and quantify reward.

This article is interesting, as the author clearly has similar difficulties in valuing XRO and perhaps articulates well why some people choose, unnecessarily, to run the stock down just because they don’t understand how to achieve a sense of it’s worth.

http://www.scoop.co.nz/stories/BU1310/S00170/xero-xronz-thoughts-on-valuation.htm

[lastmoa]

The main reason why I have not invested in XRO has been simply that I’ve not had good long distance vision of the fundamentals, there are a lot, and a very wide range, of possible forward profitability scenarios. I’ve tended to err on the side of caution and to not invest in stocks unless I can confidently perform thorough FA on high probability outcomes and assess both risk and quantify reward.

This article is interesting, as the author clearly has similar difficulties in valuing XRO and perhaps articulates well why some people choose, unnecessarily, to run the stock down just because they don’t understand how to achieve a sense of it’s worth.

http://www.scoop.co.nz/stories/BU1310/S00170/xero-xronz-thoughts-on-valuation.htm

Great find Mac. Very good balanced research article. Worth saving the pdf and going back through the scenarios. Don't know if I would compare it as closely to Salesforce.com but still ....

[MAC]

wow, fascinating article MAC. can still be a 5-10 bagger at these levels even now, unbelievable! it truly might turn out to be the Apple of NZ!

The Clare Capital valuation range of $5.60 through $30.91 is extraordinary. The scenario 3 valuation of $17.16 based on a 1.06M customer outturn would propose that XRO is presently fully valued.

I do hope for holders that XRO ultimately reaches 3M customers and $30.91 under that scenario, but with the present SP at circa $19, there seems a lot more risk than balanced upside reward would offer and if the market, at any point, decides that customer growth may plateau low, or not grow to multimillion levels, it may suddenly be a long way down, potentially to $5.60.

Still, if you are a trader rather than an investor this is the stock for you, have a planned exit and hold until the technical's fire sell, ....., imagine all that tax on XRO profits.

I don't see a place for XRO in my investment portfolio, I've decided that I do equate uncertainty in forecasting with risk, and there are better risk/reward propositions in the NZX that fit my tolerance better.

That's not to say that XRO won't become the apple of NZ, we just can't predict with any confidence.

Disc: Don't Hold

[Schrodinger]

The Clare Capital valuation range of $5.60 through $30.91 is extraordinary. The scenario 3 valuation of $17.16 based on a 1.06M customer outturn would propose that XRO is presently fully valued.

I do hope for holders that XRO ultimately reaches 3M customers and $30.91 under that scenario, but with the present SP at circa $19, there seems a lot more risk than balanced upside reward would offer and if the market, at any point, decides that customer growth may plateau low, or not grow to multimillion levels, it may suddenly be a long way down, potentially to $5.60.

Still, if you are a trader rather than an investor this is the stock for you, have a planned exit and hold until the technical's fire sell, ....., imagine all that tax on XRO profits.

I don't see a place for XRO in my investment portfolio, I've decided that I do equate uncertainty in forecasting with risk, and there are better risk/reward propositions in the NZX that fit my tolerance better.

That's not to say that XRO won't become the apple of NZ, we just can't predict with any confidence.

Disc: Don't Hold

Good analysis. At present I agree it is fully valued for the next year but this will change if they continue to add subs.

[elZorro]

A well developed spreadsheet using NPV in Excel for XRO, and based on the next 12 years of possible income the current MCap looks about right, but it depends on the depreciation rate (18% chosen).

http://www.nbr.co.nz/article/valuing-xero-–-1-hour-ts-146706

[blackcap]

A well developed spreadsheet using NPV in Excel for XRO, and based on the next 12 years of possible income the current MCap looks about right, but it depends on the depreciation rate (18% chosen).

http://www.nbr.co.nz/article/valuing-xero-–-1-hour-ts-146706

I don't want to be a corrector "because no one likes a corrector" as Mark Richardson would say. However is it not the WACC you are referring to when you quote the "18% chosen" rather than the depreciation rate?

[winner69]

Mr Wiggs said in the comments - Sadly there are very few investors who do create these models

How many people on here actually create models like this?

[winner69]

This was on Wiggs's website

So XRO has a long way to go on the growth curve

http://lwcm.co.nz/perspectives/

[elZorro]

I don't want to be a corrector "because no one likes a corrector" as Mark Richardson would say. However is it not the WACC you are referring to when you quote the "18% chosen" rather than the depreciation rate?

Blackcap, you are correct, it was niggling at me. It's a discount, not a depreciation. It started with D..


Net Present Value
The net present value (what it is worth today) varies depending upon the WACC, (weighted average cost of capital or discount rate) that we use. Think of the WACC as the amount of interest you would want a bank to pay you if the investment was as risky as Xero.


I'd heard of NPV before, but didn't know the equation or realise that it's embedded in Excel as an option. Could be really useful. I suspect this is why gold producers have shareprices that follow the gold price so hard. The big buyers and brokers may have an NPV equation where the cells are directly affected by the gold price.

[blackcap]

Blackcap, you are correct, it was niggling at me. It's a discount, not a depreciation. It started with D..



I'd heard of NPV before, but didn't know the equation or realise that it's embedded in Excel as an option. Could be really useful. I suspect this is why gold producers have shareprices that follow the gold price so hard. The big buyers and brokers may have an NPV equation where the cells are directly affected by the gold price.

Hey ElZorro, I wouldn't say I am an expert at Excel or spreadsheating but if you look at some of the financial functions available there there is a wealth of tools that are very useful and generally easy to use. You can NPV as well as IRR (Internal Rate of Return) and a host of other instruments. When studying finance (many years ago) the first thing we were taught apart from the CAPM and EMH, was discounting cash flows as being the way to value a company. NPV was the paramount figure. That was really all that mattered. The WACC is implicit in an NPV and that may vary for differing companies. Have a play around in Excel with your own figures and you may be pleasantly surprised as to its usefullness and what you can discover. Regards.

[winner69]

For a well respected and loved guru that Wiggs is this little exercise of his doesn't do him any favours - I wonder what his motive was.

For one who reckons he uses Bayesian methods (read the comments) and even mentions Monte Carlo the spreadsheet he has put together is a diabolical mess. If I presented something like that to my clients I would not get paid or invited back again

[CJ]

For those interested in WACC and modelling, PwC puts out a booklet (PDF online) with the WACC for all nzx50 companies.

[elZorro]

Thanks for that BC, W69 and CJ. I'm certainly having a look at it.

[bobxia]

just looking at my Reuters page, there's a single deal of $5.9mio traded around 2pm. someone is really bullish!!!

[Nigel]

Wow, commitment!

I couldn't resist any longer.

[psychic]

:) Buyer right, seller wrong?

[lastmoa]

Looking pretty weak today. Big seller yesterday may have known something!

Nigel will be mighty peeved if she drops ;)
Don't think there is anything to read into a dip from $19 highs. Story not changed and, as we all know, the volatility in techs are much more than your average stock. I'm trying to time a entry to top up. US may drag on it and others.
Xero about to go on 20-stop USA roadshow from 21st Oct for a month.

[Shore]

Don't think it's a debt ceiling thing.. I think it's just a periodical cleanse that Xero seems to go through when the SP plateaus at a new height - buyers who bought at cheaper prices wanting to cash in some profits. Nothing changes really - story continues on track.

But yes if you were wanting to get back in or top up, well, this might be one of those opportunities that you're looking for.

[lastmoa]

Don't think it's a debt ceiling thing.. I think it's just a periodical cleanse that Xero seems to go through when the SP plateaus at a new height - buyers who bought at cheaper prices wanting to cash in some profits. Nothing changes really - story continues on track.

But yes if you were wanting to get back in or top up, well, this might be one of those opportunities that you're looking for.

Agree, Shore.
Am watching the movements to time a top-up. Also have one eye on the US, as actions there do have an influence on not just Xero but all. Do see this correction as a profit-taking/caution/portfolio balancing action.

[bobxia]

from Reuters, XERO LTD XRO.NZ SEEKS TRADING HALT PENDING RELEASE OF MATERIAL ANNOUNCEMENT BY CO IN RELATION TO OUTCOME OF THE CAPITAL RAISE

[Toasty]

Deep breath. Whats up? What capital raise? Did I miss something?

[jamiec26]

Deep breath. Whats up? What capital raise? Did I miss something?

US listing maybe?

[CJ]

They only have one year of cash left at their current burn rate so timing makes sense. Will a SPP follow?

[Stranger_Danger]

There once was an internet based theme,
That became every shareholders dream,
The more revenue that came in,
Led to more capital raisings,
God I hope it isn't a ponzi scheme.

[zs_cecil]

Ipo...ipo...

[Toasty]

There once was an internet based theme,
That became every shareholders dream,
The more revenue that came in,
Led to more capital raisings,
God I hope it isn't a ponzi scheme.

Not overly helpful in my present fragile state. I think they are a bit visible to be a Ponzi scheme.

[zs_cecil]

Anyone found where it says the trading halt is related to capital raise? I could not find it :(

[Shore]

Palms suddenly became very sweaty.

[zs_cecil]

Palms suddenly became very sweaty.

Me too. Maybe the timing of the trading halt makes us feel a little bit nervous...

[bobxia]

MARKET RELEASE
Trading halt for Xero Limited pending capital raise
The ASX and NZX have, at Xero Limited's request, placed a trading halt on Xero Limited's shares.
Xero requested this trading halt while it undertakes a capital raise.
Xero expects to update the market with a more detailed announcement on Monday 14 October, 2013.

[apac]

http://www.asx.com.au/asxpdf/20131010/pdf/42jygycb831xvs.pdf

[Shore]

So how long do these things usually take??:blink:

[Shore]

October 14!!!!

[bobxia]

when they got the 60mio in Nov last year, SP jumpped 20%. hopefully the same pattern this time : )

[zs_cecil]

What an un-usual trading halt. Took the rest of week off till Monday...

[apac]

so is capital raising usually a good thing or a bad thing or depends?
What's happened to the SP when Rod raised money in the past? What's happened after the capital raising?
If someone can give us a history lesson that would be great :)

[Shore]

i wonder if there's a chance the details of this might slip out via one way or another - hence the long lead time to Monday? in turn does that indicate something larger afoot than a simple private capital raising?

[Shore]

@apac - in Xero's case, it's a very good thing.

[zs_cecil]

so is capital raising usually a good thing or a bad thing or depends?
What's happened to the SP when Rod raised money in the past? What's happened after the capital raising?
If someone can give us a history lesson that would be great :)

I remembered Xero has never had a trading halt for such a long time for the capital raise before. Previous, Xero usually released the news about capital raise with surprise rather than having a long break before releasing the news.

[apac]

just looking at 30/11/2012 11:40 announcement and historical share price
Xero raises NZ$60m from US investors
So if it's good news, it looks like there will be lots of buying, followed by lots of selling the next day, then back up again


6 Dec 2012
7.19
7.60
7.12
7.60
139,700
7.60


5 Dec 2012
6.98
7.20
6.91
7.20
112,000
7.20


4 Dec 2012
7.65
7.65
7.00
7.00
171,800
7.00


3 Dec 2012
6.95
7.75
6.95
7.70
199,500
7.70


30 Nov 2012
6.45
6.89
6.44
6.88
79,500
6.88

[randoman]

A raising that shareholders can participate in would be nice...previous CRs have been private
@apac - it's positive long term but your holding is diluted. Short term, the price might dip to the placement price but that hasn't been the case with xro in the past.

[Shore]

The positive for me, if for nothing else, is that a capital raise right now is a clear sign of aggression for the US market.

[bobxia]

I’m amazed how many people are watching this space “full time”!!! Any news will be well-discussed here within few minutes!!! Is’t due to smart-phones is so popular nowadays?

[Stranger_Danger]

A raising that shareholders can participate in would be nice...previous CRs have been private
@apac - it's positive long term but your holding is diluted.

Oh noes! What will that do to the EPS?

Yeah ok, I think I'll just slink back into my cynical bunker...

[Stranger_Danger]

Oops. Double post.

[lastmoa]

Seems speculation centered around capital raising .... haven't seen anything to give strong evidence to quantify that but if anyone has any info .... ahh. just found it on nzherald. Fair enough.

[lastmoa]

i think it has become obvious to the board that the 70 million on the balance sheet isnt going to go far in the USA.

these kinds of development are capital intensive but the marketing in the USA will also be very expensive..

But if the pull it off in the USA it sure is a nice honeypot. Pedal to the metal.

[apac]

What are some of the likely scenarios for the announcement on Monday? What could happen to SP. Anyone preparing to buy or sell?

[gregrday]

A capital raising is saying "we don't have enough cash in the bank to support our growth plans, so we need to get money from somewhere". Options are basically capital raising or debt.

This is not a positive for shareholders, in that your current shareholding will be diluted.
It may be positive in the longer term if the capital is deployed appropriately, and the value of the company increases sufficiently. This is a maybe, so at this point in time in my opinion, this is a negative sign.

To clarify, Xeros current valuation in my opinion is based on some level of success in the states. A capital raising seems to be saying that is unlikely without a big injection of cash.

Any thoughts why they are not raising debt in these low interest rate times?

[gregrday]

A capital raising is saying "we don't have enough cash in the bank to support our growth plans, so we need to get money from somewhere". Options are basically capital raising or debt.

This is not a positive for shareholders, in that your current shareholding will be diluted.
It may be positive in the longer term if the capital is deployed appropriately, and the value of the company increases sufficiently. This is a maybe, so at this point in time in my opinion, this is a negative sign.

To clarify, Xeros current valuation in my opinion is based on some level of success in the states. A capital raising seems to be saying that is unlikely without a big injection of cash.

Any thoughts why they are not raising debt in these low interest rate times?

[apac]

Could there be a scenario where we see a sharp drop in share price because of the announcement?

[winner69]

Oh noes! What will that do to the EPS?

Yeah ok, I think I'll just slink back into my cynical bunker...

What's eps SD. ....in the context of XRO

[Dentie]

Could there be a scenario where we see a sharp drop in share price because of the announcement?

IMVHO...and to keep my consistency of comments consistent... if the belief is there, you have nothing to worry about. Afterall, Rod, Hamish, Sam and Peter have bucket loads to fund the cash flow with.

Then again, if they choose not to, then either offer more shares to the public to fund their cash needs - or, dare I say it, go to a bank. Looking at their latest balance sheet though and with interest rates tipped to rise ... which bank would take the gamble - on the balance sheet alone (ie - without PG's etc from the above)?

Tons and tons of "paying customers" ... but a $14m loss on a T/O of $39m? Cash burn is right ....

If they don't get this right .... there will be a stampede..... but that is just my take on it ...

[Dentie]

What's eps SD. ....in the context of XRO


Exactly Winner!!!!

[Stranger_Danger]

Then again, if they choose not to, then either offer more shares to the public to fund their cash needs - or, dare I say it, go to a bank. Looking at their latest balance sheet though and with interest rates tipped to rise ... which bank would take the gamble - on the balance sheet alone (ie - without PG's etc from the above)?




They would never borrow from a bank - why do that when selling shares is so cheap and they are so in demand?

Besides, could they borrow from a bank?

This is a 2 billion dollar company, yet my ASB Securities account says the margin lending ratio is 0%.

It says the margin lending ratio on CNU - the company John Key said could go broke - is 65%.

In terms of a comment on risk, that is....interesting.

[Dentie]

They would never borrow from a bank - why do that when selling shares is so cheap and they are so in demand?

Besides, could they borrow from a bank?

This is a 2 billion dollar company, yet my ASB Securities account says the margin lending ratio is 0%.

It says the margin lending ratio on CNU - the company John Key said could go broke - is 65%.

In terms of a comment on risk, that is....interesting.

Assuming you had $4 billion to spend on acquisitions .... would you purchase XRO outright for $2 billion?

If so, what would you expect to get for your $2b?

[bobxia]

They would never borrow from a bank - why do that when selling shares is so cheap and they are so in demand?

Besides, could they borrow from a bank?

This is a 2 billion dollar company, yet my ASB Securities account says the margin lending ratio is 0%.

It says the margin lending ratio on CNU - the company John Key said could go broke - is 65%.

In terms of a comment on risk, that is....interesting.

i borrowed 50% from For barr, and they charge 6.69% interest, which is not bad.

[David Hardman]

What is going to be really interesting to see is if this is the time Rod Durry takes money off the table.

Money will be raised from overseas investors.

[zs_cecil]

notice there is no public raising going on... you get to buy at the market rate on limited shares traded.... are they to scared to raise from the public?? depress the share price?? should be a share split here?

Share split will be awesome. 1:10 would be good. ;)

[CJ]

I assume since no one has heard anything, any new capital wont be from NZ. If overseas VC's, I'm surprised they didn't have it all lined up like previous capital raisings.

[Dentie]

"Assuming you had $4 billion to spend on acquisitions .... would you purchase XRO outright for $2 billion?

If so, what would you expect to get for your $2b?"

THEY WOULD HAVE TO HAVE SOMETHING VERY SPECIAL!!!!!

Thanks for your answer Surfer...

[apac]

Anyone got a strategy for trading after announcement?

[CJ]

Anyone got a strategy for trading after announcement?Wow - that is a big investment at a big price (premium to market) and is probably another 3 years cash burn on top of the 1 year they have left.

No sell down by the founders.

Unfortunately no SPP.

If you trust the big money, this would be a buy signal.

Disc: Dont hold - too busy wiping my tears on DIL share certificates.

[Stranger_Danger]

180 here, 180 there....eventually, you're talking about real money!

Ponzi similarities aside, this *is* good news - it appears no existing holders sold out, and this is a substantial amount of cold hard cash that someone has put down.

Cash won't be an excuse in the US now, which is presumably just how they want it.

[psychic]

Excuse my ignorance - so these are new shares issued?

[winner69]

Excuse my ignorance - so these are new shares issued?

Yes ...new shares

[pierre]

Phenomenal news. I thought they might go for another $50 mill ...but $180 million...unbelievable! US accounting market look out - Xero is about to attack.

[CJ]

Looks like $18.15 is your new target price for support (the open will most likely exceed this). A nice bullish sign for those who have capital in play here!Forget that, this will go well above $18.15.

[winner69]

Good for another $20 eh?

Get happy moosie

Sell those doggy DIL shares first thing and have some self belief .....you a trader at heart .....so trade

You made a call on XRO already ....self belief man .....buy at the open ...don't dilly dally around

[winner69]

Don't you know it ;)

Those charts are looking good for a run again...

So you going to do something about it this time .....self belief man ....gut instinct ....act ....don't just talk

Please tell me you are going to take this opportunity ...please

[winner69]

I can't find the details of that CJ - can you point me in the right direction?


Methinks typo or left the no out

[CJ]

I can't find the details of that CJ - can you point me in the right direction?Typo -should ahve said "No sell down", not :So sell down"

[Toasty]

Well, XRO is back on my portfolio, putting my money where my mouth is! :t_up:

Go Moosie. You won't regret it....well you might, but probably not today. $19.89 up now!

[Toasty]

"Well, XRO is back on my portfolio, putting my money where my mouth is!"

and i will have to integrate our new runtime to allow transactions to flow backwards and forwards to there platform.

we are currently starting to test tax modelling using new models

i think the public should have been allowed to buy into this

we will see how good there platform is when we intergate into there core

if we find there are problems i will soon let you know....

The public were allowed to buy into Xero or do you mean this system you are working with?

[boofters]

With this sort of capital base why not apply for a Banking licence? Now that would be disruptive....

[psychic]

I appreciate that all this new capital shows confidence by some pretty good backers, but what - has the potential for xero changed? Was there doubt before that they might not be able to fund this expansion? Just trying to keep things in perspective.

[psychic]

Crikey, its not like the cash burn has been insignificant till now, but they clearly have big plans. Yes a big vote of confidence.
Thanks

[Schrodinger]

Wow - that is a big investment at a big price (premium to market) and is probably another 3 years cash burn on top of the 1 year they have left.

No sell down by the founders.

Unfortunately no SPP.

If you trust the big money, this would be a buy signal.

Disc: Dont hold - too busy wiping my tears on DIL share certificates.

huge vote of confiedence in the long term plan

[Tom.Pullar-Strecker]

Hi Xero investors, A good day for the company obviously. Is there anyone on this forum who bought Xero shares at IPO, still has a holding in the company (any size, small or big) and would be willing to chat to me briefly for a story I am writing for Stuff/daily papers on the share price jump today? I can be reached at tom.pullar-strecker@fairfaxmedia.co.nz 04 474 0552 Thanks!

[whatsup]

9920000*18.15 = $180M

So no, the founders did not sell down

Moosie as you know if the founding s/hers sell down that money goes to them, if the company sells additional shares the money raised goes to the company.

[Toasty]

Hi Xero investors, A good day for the company obviously. Is there anyone on this forum who bought Xero shares at IPO, still has a holding in the company (any size, small or big) and would be willing to chat to me briefly for a story I am writing for Stuff/daily papers on the share price jump today? I can be reached at tom.pullar-strecker@fairfaxmedia.co.nz 04 474 0552 Thanks!

I vote Turmeric. Hes always positive.

[Schrodinger]

What was it at launch $1? Would be interesting hear the reasons for getting in at the start.

Could you also write about the rise of DIL from 10c to $7? Would love to hear about that one.

[Tom.Pullar-Strecker]

Yes, DIL not faring so well in past couple of days. Signs of saturation in the US market, but also drop in new ex-US business, seem to be weighing heavily.

[Toasty]

Hi Tom. Has anyone been in contact?

[Tom.Pullar-Strecker]

Not so far, if you are in that situation & happy to chat please give me a call - we can discuss ground rules first to check you are comfortable!

[Food4Thought]

I tell you what though, I think mine is a pretty good story (Would think XRO might like it too):

Traveler returns to NZ in 2008 after a 7 year OE to go back and study, thoughtful brother suggests XRO as an interesting investment opportunity, buys on market at around the $1.5 range, been selling down slowly ever since to fund several 5 years of study, now 1 year off completion of PhD in Economics....

That is awesome, hat off to you, and a tad bit of luck on your side. Well done! and when your out and complete with your studies... 5 figures will be a thing of the past. Stoked for you.

[Toasty]

I tell you what though, I think mine is a pretty good story (Would think XRO might like it too):

Traveler returns to NZ in 2008 after a 7 year OE to go back and study, thoughtful brother suggests XRO as an interesting investment opportunity, buys on market at around the $1.5 range, been selling down slowly ever since to fund several 5 years of study, now 1 year off completion of PhD in Economics....

Awesome. Call the reporter. $1.50 is close enough. I am sure that he would like to hear it. Positive news story could be good for the share price and maybe another year of study...

[gv1]

Thanks mate, appreciate it. Yup, certainly acknowledge I've had a bit of luck.
Well done, if you don't mind what other stocks are you invested in apart from snakk.

[gv1]

Not invested in SNK mate - (I was but sold holding at 0.145 after SPP)

My portfolio consists of PEB, ATM, HNZ, RYM, SUM, NZO, FBU, WHS, CNU, AAPL, and IXJ.
Thanks buddy, mind saying how much. Is this part of you doctorate research...just joking.

[gv1]

No probs.
No I don't like to divulge exactly how much, I'm a small retail investor (and a student to boot) so you can probably infer some sort of range from that.
Thanks, much appreciated.

[QOH]

I tell you what though, I think mine is a pretty good story (Would think XRO might like it too):

Traveler returns to NZ in 2008 after a 7 year OE to go back and study, thoughtful brother suggests XRO as an interesting investment opportunity, buys on market at around the $1.5 range, been selling down slowly ever since to fund several 5 years of study, now 1 year off completion of PhD in Economics....
Well done Tumeric, great story, good on you for listening to your brother, I can't get my kids to put any money in the sharemarket

[blobbles]

I WANTED to get in on the IPO all those years ago as I thought it was a great idea and was backed by some great investors.

Unfortunately I was moving to Malaysia and had to save my money, but I had 30k at the time ready to go. And to think that would be worth 600k now... oh dear! Ahhh well, live and learn, now I realise investing is about following your gut too! In the end I got in at $2.75 but due to life circumstances had to leave at a measly 100% profit, despite wanting to stay in for the long haul...

Now I will hopefully go and work for them (as an IT guy about to come back into the country) and get some of my imaginary lost earnings back!

[Toasty]

Well done Tumeric, great story, good on you for listening to your brother, I can't get my kids to put any money in the sharemarket

I told my boys, 6 and 8, that I owned a gold mine (NTL). Instant interest. I explained how it worked and my youngest wanted to own some planes so I explained how that worked and went in with him on some Air NZ shares. He bought $30 with his savings and I got some as well.(a few more than $30). I pay him his dividend share when it comes out and keep track of it in a spreadsheet for him. The oldest hasn't decided yet but keeps looking at the NZX site.

[brucea]

I was an early investor in XRO, as well as BLT, RAK and SNK (the latter because it was said they were "another Xero - yeah, right!). Oddly enough three accountant friends of mine were quite negative every time I bought Xero shares and I suspect I just went opposite to their views. Needless to say the other shares apart from XRO have turned belly up, but thankfully I held on to XRO. No, I am not go to tell how much I have lost with my BLT investment which I thought would make me a millionaire.....

[Nigel]

I was an early investor in XRO, as well as BLT, RAK and SNK (the latter because it was said they were "another Xero - yeah, right!). Oddly enough three accountant friends of mine were quite negative every time I bought Xero shares and I suspect I just went opposite to their views. Needless to say the other shares apart from XRO have turned belly up, but thankfully I held on to XRO. No, I am not go to tell how much I have lost with my BLT investment which I thought would make me a millionaire.....

I bought into XRO at around 80c. Sadly I sold them when they were 'over-priced' at between $2-$5.

I'm still confident that BLT will make me more money. Lots of new expertise and investment from credible groups (strong connections in China and Middle East), new products coming on board and regulatory approvals in place. Buckle up :)

[Toasty]

Toasty (http://www.sharetrader.co.nz/member.php?11006-Toasty)

what i can say is that one small part of the runtime which has many personal and business computing capabilities is the commands to allow any one without technical programming skills to develop tax modelling and in the future tax file options for any country

so its a large kit set lego runtime for doing lots of odd jobs and some pretty big ones like tax

so it if ever go IPO i promise to show you under the hood ....

cheers

the xero product does not have to be good bad just beautiful ... and its got the capital to last a good while ...

its an organisation now and it can buy if it wants to ....

Thanks Steve. Sounds interesting and probably over my head.

[apac]

Does anyone use stockta.com, or yahoo finance? any thoughts on their tech analysis? are there other websites you guys would recommend?

[brucea]

I bought into XRO at around 80c. Sadly I sold them when they were 'over-priced' at between $2-$5.

I'm still confident that BLT will make me more money. Lots of new expertise and investment from credible groups (strong connections in China and Middle East), new products coming on board and regulatory approvals in place. Buckle up :)
Thanks Nigel - apart from wanting to become a millionaire,I bought BLT shares because I really believed in their products and still regularly buy and use Blis K12 and M18 - so I am all buckled up waiting for any good news from Blis in the future!

[apac]

What do people feel will happen with xro tomorrow? anyone buying more? XRO does have a tendency of falling after a big rise but this time is different? 180m is a lot of money, and now the goal post has probably shifted, they could be looking at 1m customers much quicker and exceeding that by much more.

I think a lot of us would have thought I should have held and ignored the short term fluctuations. I myself seemed to have bought many times when it's high and sold before it got back to the same level. Have still made money by occasionally buying low though. Maybe it's time to be patient and hold for long term.

I am wary of the debt ceiling tho. If US defaults and there's a recession, XRO would probably drop like everything else. The chance of default is low but still there's a chance.

thoughts?

[lastmoa]

What do people feel will happen with xro tomorrow? anyone buying more? XRO does have a tendency of falling after a big rise but this time is different? 180m is a lot of money, and now the goal post has probably shifted, they could be looking at 1m customers much quicker and exceeding that by much more.

I think a lot of us would have thought I should have held and ignored the short term fluctuations. I myself seemed to have bought many times when it's high and sold before it got back to the same level. Have still made money by occasionally buying low though. Maybe it's time to be patient and hold for long term.

I am wary of the debt ceiling tho. If US defaults and there's a recession, XRO would probably drop like everything else. The chance of default is low but still there's a chance.

thoughts?

Chance of default is very low. If you are wary of such odds happening you should probably have your hard-earned dollars in the bank, or something equally boring, like property.
Yes, you are correct in that the 'goal posts have moved' and having $230mill means the first mover advantage Xero has can be pressed on. It sure is a great vote of confidence when the investors come in at these prices.
Sure any recession won't do any shares (or much else) any favours, but business still needs an accounting system. It is not a luxury item they are selling.
As for what Xero's SP does tomorrow .. does it really matter. Follow the story, not the day-to-day fluctuations of Xero and other tech/bio stocks, that traditionally have volatility. The unravelling story looks good to me, thus far.

[PartyPooper]

XRO is just a massive tease for investors like myself with limited capital. I was hoping to get an entry point at $15 awhile back but missed it after good news the next day sent it soaring to 18. Personally I hope the US debt crisis drags on for a bit and as a entry point of 18 right now looks good. I doubt it will happen though.

[Copper]

[QUOTE=moosie_900;432819]19.70 was a nice support level today. $20 is psychological resistance. I think this is a huge buy signal as significant holders have signed up for even more shares at a massive price, growth will takeoff again if all goes to plan and will draw in even more US buyers. I wouldn't be surprised if we go for a $3B Mcap within the next few months.

I recall over the years several psychological resistance levels and each time we went through them as if they were non existent .Hope it's the same today.

[Toasty]

Personally I am hanging in for the long haul. The overall story is too good to stay away from. Massive amount of capital available. Good reception in the US. 29 million potential customers. An incumbent who is good but not quite hitting the right note with clients from what I can tell.

Even a small amount of US market share translates to a large chunk of revenue and I assume that Canada hasn't been addressed yet. There are couple of businesses up there in the frozen wastelands. Moosie may have seen a couple.

Then I guess its a matter of crossing the language barriers....not Canadian. More like the Asian countries.

[Toasty]

We're all hosers over that side of the border haven't you heard eh? I mean, you can't sit outside having your double-double on your chesterfield and not wear your toque when the cold sweeps in after those Chinook winds eh? I mean, you just got to giv'er to your liver quivers, am I right eh?! :t_up:

Toque - A small cap or bonnet of such a type worn by a man or woman. You learn something everyday. I am glad that we don't wear bonnets here...

[Toasty]

Boom $20 milestone hit ;)

:t_up: :D :cool: Seems like a smiley moment.

[Shore]

My gut feel is that Xero is going to blaze its own path and win its own market share, irrelevant of what Intuit is able to do with Quickbooks. MYOB was dominant in Australia, but that hasn't stopped Xero being able to come in and wipe the floor with them. Unfortunately, for MYOB and Intuit, this is a new generation and a new breed of accountants/advisors coming through who have iPhones in their pockets and are moving with the times. I like Xero's strategy though, to keep up the appearance of a war with Intuit. It keeps their name in the press, it promotes a battle between them and elevates Xero above all the other pretenders (Freshbooks, Wave etc). In all reality, Xero's vision stretches far higher than that of Intuit's. Xero want to become the platform for small businesses worldwide.. the central hub from where everything branches out. It's a lofty goal, hugely ambitious, but the opportunities that are created if they can attain that position in the global marketplace is mind boggling. That's why Xero is getting the capital, and the interest from investors, because ask yourself - name one other company who is better positioned in a global sense to take advantage of that opportunity?

[lastmoa]

Was just about to ask that mate....What kind of trade you looking at here out of interest?

EDIT: I got in yesterday at open at $19.45. A proportion of the shares I purchased yesterday I intend to hold long term, the rest I purchased as a short term trade...

I'm no chartist though so just go on my gut + a little bit of what I've picked up from the likes of KW, Hoop yourself and others....Am hoping I might be able to exit at something like $22+. In the past with Xero it can take weeks for the effects of big announcements like these to have their effects...

I'm predicting that you will see your $22 soon and get to take your profit .... but may also live to regret it.

[zs_cecil]

Check out the depth on the asks.....1424 shares total!!

$30 is not far next year. Definitely the most amazing stock in the history in NZ.

[apac]

Can't answer your question sorry apac. Interested though, are you looking to trade Xero? Or looking for an entry point for a long term hold?

I'm going for a long term hold. The idea is to make certain percentage, maybe double, get back the capital I invested, then I'm pretty risk free, then let the profit do its own thing. SP goes up or down, it won't matter to me, it's money I never had.

I have had faith in xero for a long time, but just got distracted by the short term fluctuations. Should have just held, but sometimes got greedy and wanted to sell high and buy low later. Looking through my history, most of the time I've sold high and occasionally bought back lower, but often bought back higher.

I think this investment is a once in a lifetime opportunity, I'll stick with it long term, but also eliminate risk when I can.

[Toasty]

I am always amazed that the rest of my share portfolio doesn't behave like Xero. What is wrong with them?

[apac]

I'm going for a long term hold. The idea is to make certain percentage, maybe double, get back the capital I invested, then I'm pretty risk free, then let the profit do its own thing. SP goes up or down, it won't matter to me, it's money I never had.

I have had faith in xero for a long time, but just got distracted by the short term fluctuations. Should have just held, but sometimes got greedy and wanted to sell high and buy low later. Looking through my history, most of the time I've sold high and occasionally bought back lower, but often bought back higher.

I think this investment is a once in a lifetime opportunity, I'll stick with it long term, but also eliminate risk when I can.

Also forgot to mention, XRO is my favourite company, and it's the only one where when people see it falling lots that I tell them "great, I've been buying more".

I've bought in again today at open, and if it does fall at some point, I'll buy more.

[Jay]

I am always amazed that the rest of my share portfolio doesn't behave like Xero. What is wrong with them?

Exactly, I seem to have the same problem, well I would have if I had not sold out of Xero some time ago when the sp was in single digits!

[apac]

In the scoop article where everyone's been talking about earlier this month, it mentioned: "The returns a venture capital (VC) investor want – 5-20x the investment that they make".

Does that mean potentially investors see Xero share price go up at least another 5 times? so over $100?

And if Scoop's scenario 3 and 4 predictions are correct, Xero could have over 1m customers in by FY16?

http://www.scoop.co.nz/stories/BU1310/S00170/xero-xronz-thoughts-on-valuation.htm

Personally, I think the $180m funding changes everything. Xero is no longer fully priced, and even scenario 4 value of $30.91 seem cheap.

[Shore]

@apac - just ask yourself what will happen in a few years time if Xero gets well under steam in the US, starts signing up customers left right and center and has a successful listing on the NASDAQ. Take a look at the market cap's of other SaaS companies on that exchange... combine that with the clout Xero will get globally if it can get a foothold in the USA and the spinoffs that will have in other markets it's yet to have a presence. Of course, if you start thinking that Xero is already worth more than "SkyCity" and other locally NZ companies then how could it possible grow another 5-10 times... but you need to realign your thinking and start looking at Xero's true contemporaries, none of which I'm afraid reside in this country.

[apac]

@apac - just ask yourself what will happen in a few years time if Xero gets well under steam in the US, starts signing up customers left right and center and has a successful listing on the NASDAQ. Take a look at the market cap's of other SaaS companies on that exchange... combine that with the clout Xero will get globally if it can get a foothold in the USA and the spinoffs that will have in other markets it's yet to have a presence. Of course, if you start thinking that Xero is already worth more than "SkyCity" and other locally NZ companies then how could it possible grow another 5-10 times... but you need to realign your thinking and start looking at Xero's true contemporaries, none of which I'm afraid reside in this country.

You are probably right. Time will tell.

[CJ]

WOW! Growth ahoy boys and girls!

http://www.stuff.co.nz/dominion-post/9282595/Xero-to-double-staff-after-capital-raising

Someday I would like to get in touch with Rod Drury and see about archiving and/or curating a museum for Xero. My two favourite things combined into one! The crowning touch would be if XRO spread out into militaria, my other love ;)

One day, one day...He lives in the Hawkes Bay so shouldn't be too difficult to stalk/track down. You should be able to find him driving his Porsche or cycling up Te Mata peak.

[blackcap]

He lives in the Hawkes Bay so shouldn't be too difficult to stalk/track down. You should be able to find him driving his Porsche or cycling up Te Mata peak.

Think you may have opened up a big can of worms there CJ :) :P Rod will be thanking you for the rest of his life!

[Shore]

Wow $10m through the till

[bobxia]

just looking at my Reuters page, there's a single deal of $5.9mio traded around 2pm. someone is really bullish!!!just recall my observation the other day, it seems like someone inside trading. shall we query NZX to investigate?

[Shore]

Huge endorsement of Xero's plans. Very encouraging.

[Shore]

Milford were part of the latest capital raise with $16m http://www.nbr.co.nz/article/xero-cracks-20-share-after-capital-raising-now-worth-more-skycity-sky-tv-bd-147132

[lastmoa]

Volume is going B-A-N-A-N-A-S. Look at those funds flow in, nice little support levels sprouting up at new highs :)

Volumes in NZ high but much lower in Australia. Interesting stuff and not a concern. Will come on the Australian radar once more progress is made against MYOB. Exciting stuff.

[blockhead]

''if it seems too good to be true..................''

[Shore]

I think all we're seeing now are the US funds sitting up and taking notice of what Matrix did (the lead in the latest capital raise) and follow them into the stock. This was inevitable... Xero is too good a product and was only a matter of time before its name spread out across the US.

[Shore]

I think it's about $16m from Milford, $6m from Valar, maybe the remainder from Matrix? Might be wrong...

[gv1]

Oh this one has gone crazy, after been skeptic for so long, took a dip in this one this morning. $2..1.

[gv1]

Hope so...thanks turmeric

[FarmerHamilton]

Bang on mate -just hit 21.6 for a 5% gain.... But you aren't around to see it :(
I'm sure the 28% gain on PEB makes up for it though ;)

If you could short stock in NZ i'd be thinking of putting a position on in XRO now. Get to a 18 P/E ratio the company needs to make a $140,000,000 profit ... you are paying through the nose for earnings WAY WAY WAY WAY into the future. Feels like a bubble !!

[FarmerHamilton]

Join the queue in a long line of people who have said the same thing al the way from $2.80!

By the way, there are ways to short stocks in NZ, feel free to go for gold!

At 280 it was a decent long ... at 2150 there is NO WAY you are getting fair value , you are now getting into nose-bleed territory. When people who have watched all the way from $2.50 to $21.50 from the sidelines final throw in the towel and jump in to me that is the time to sell. If I had to take a position now I would definitely choose the short side of the trade.

[Shore]

Wow - the stock is unstoppable. Heading for $3b?

[FarmerHamilton]

Why don't you short it then?? There's info on this forum to advise how to do so. Not my thing so can't help you much more than that.

I feel though that your conviction has waned somewhat in the space of two posts..... I suspect you won't be shorting it.

In addition, it appears to me you are effectively saying that Matrix, Thiel, Milford, all the other new investors from this capital raising, Drury, Morgan, Winkler et al have all got it wrong and you've got it right? Would that be a fair assertion?

I'm not saying they are wrong , but that was new money at $18.15 ... the stock is 20% higher now so I can't see how the whole company is worth 20% more than a few days ago with cash now sitting in the bank .

Good luck with your investment ...

[gv1]

I'm not saying they are wrong , but that was new money at $18.15 ... the stock is 20% higher now so I can't see how the whole company is worth 20% more than a few days ago with cash now sitting in the bank .

Good luck with your investment ...
Hi FarmerH,
Does sml looks better.

[Toasty]

$22.00 up now. Nuts. A big vote of faith in their future? Always a bit scary when this becomes mainstream news and the shoe shine boys pile in. Having said that still holding...

[FarmerHamilton]

Hi FarmerH,
Does sml looks better.

No, I think SML is toppy here too and I'm holding 64,000 of those ( can't sell due to escrow )