Xro - xero [Archive] - Page 8 - Sharetrader Forum

Dentie

16-10-2013, 04:58 PM

In saying that, I've just sold my trading block of XRO shares. My target price was $22.5 - I watched it go above, waited to see if it held (which it has not) and I am now out at $22.55 for a 16% gain on a $19.45 entry. Very happy to maintain my long term position though.

Again Turmeric ...good onya mate.

As at today...
Capital Value per share = $22.20
Book Value per share = $ 2.20 (approx after new cash)

Fresh Air = $20.00

balls of steel is right!!

Lorne Ranger

16-10-2013, 05:52 PM

"Fresh Air = $20.00

balls of steel is right!!"

stop scaring them ... its holding the whole nzx up!!!!

even if you dont hold the stock we all benefit from the US dollars investments and Gaynor ect.

the company is not going away and they have shown it not what you know, its WHO you know and they have the open wallets of the VC boys

the products simple interface and uncomplicated approach no matter that they may run into problems of flexibility doesnt matter

the public have spoken...

and thats that!!!

help we will even have to intergrate to it becuase the market says so....

Thats the most sense you've made so far. ;)

Hawkeye

16-10-2013, 06:00 PM

Bilbo

16-10-2013, 07:04 PM

So did anyone bar me purchase the XRO IPO?
Sorry I didn't see anyone put their hand up and was curious

Did anyone else get on the bus in time for that handy 0.90c SPP?

oh and thanks to whoever was peddling PEB, I managed to snag a small holding about a week ago, buying only because I liked what I had read on the forum, and todays announcement shows that you knew what you were talking about.

Didn't get in at IPO, but bought my first lot in April 09 at $1.26 which allowed me to participate in the $0.90 SPP. Bought again at subsequent SPP and at various stages along the ride. Have not sold any and can't see me selling any in the near future. Has been a great ride, but always good to keep in perspective and remember the ones that I hold that have gone the other way (SNK etc). It does demonstrate though how one great share can completely change a portfolio.

Everwood

16-10-2013, 09:56 PM

So did anyone bar me purchase the XRO IPO?
Sorry I didn't see anyone put their hand up and was curious

Did anyone else get on the bus in time for that handy 0.90c SPP?

oh and thanks to whoever was peddling PEB, I managed to snag a small holding about a week ago, buying only because I liked what I had read on the forum, and todays announcement shows that you knew what you were talking about.

I did not take part in the original Xero IPO, but I got the majority of my shares between 70 to 83 cents. Then I got some more shares in both SPP. My average price is $1.03. I have now got 2000% return on my investment. I have only sold just under 6% of my original investment when Xero was in the 16 dollar range in June.

Everwood

16-10-2013, 10:00 PM

In light of FarmerHamilton's post earlier today suggesting Xero was a good short (SP has since risen by roughly a $1 since his post). I thought we could revisit the time when our "esteemed" Prime Minister suggested Xero was overvalued....That was back on 21 March this year when the SP was roughly $11. As I write we are now up over 100% since those comments were made apparent!! Maybe he is not the financial wiz some people say he is ;)

Do you have a link to that John Key comment? I would like to email that comment to a friend. I tried googling it, but was not able to find it myself.

gv1

16-10-2013, 10:39 PM

[QUOTE=Everwood;433491]Do you have a link to that John Key comment? I would like to email that comment to a friend. I tried googling it, but was not able to find it myself.[/QUOTE
Hi Everwood
What made you to invest initially and what do you do for employment, if you don't mind me ask that question. What made you to hold on to it when it was going over $5-18.

Toasty

16-10-2013, 10:44 PM

apac

16-10-2013, 10:52 PM

Last few days has been amazing. I've decided I've made enough out of xro for now and taken back most of my initial capital. If prices fall or if there's another huge announcement I might buy more

winner69

17-10-2013, 01:46 AM

Guy on radio says strong buying demand out of Asia today

psychic

17-10-2013, 08:37 AM

I was thinking she might be getting a little tired at these levels but pleased to see another 300000 shares traded after close @ $22.10 so maybe demand there yet..

Everwood

17-10-2013, 11:13 AM

It might happen this week, but Xero is getting very close to $23.53 which will make Xero 3 Billion Dollar Company.

Shore

17-10-2013, 11:19 AM

That's not what my calculator tells me? What am I missing?

Everwood

17-10-2013, 11:23 AM

That's not what my calculator tells me? What am I missing?

Have you included the new issue of 9,917,358 shares? The total amount of shares on offer is now 127,523,561.

Shore

17-10-2013, 11:24 AM

Oh right - so NZX hasn't updated? I see 117,606,203 recorded with mcap of $2,716,703 (SP 23.10)

Dentie

17-10-2013, 11:32 AM

Buyers looking a bit weak now, 30%+ gian over the past few days, may see a slow down in action now (Oz opening might bring new fuel to the fire, but will wait for confirmation...)

No way Moosie ... debt ceiling sorted, yanks got plenty of dosh ....let's go!!

Shore

17-10-2013, 12:07 PM

Well their formulas and calculations are pretty worthless. Usually a tech stock does private funding rounds, gets some traction and then publicly lists at the right time (like Twitter is doing now). Xero is completely unique is that we've all got front row seats to an explosive tech company with global aspirations - the investors just need to hang in for the ride and the brokers.. well.. they need to play catch up.

17-10-2013, 12:21 PM

Xero is completely unique is that we've all got front row seats to an explosive tech company with global aspirationsvery interesting case study thats for certain, Angel rounds, series A, B, C, VC rounds, some up some down, and all played out on the NZX.

gv1

17-10-2013, 12:52 PM

Anyone has any contact with brokers, as to where the funds are flowing from...is it o'seas investors.

Shore

17-10-2013, 01:02 PM

Very hard to focus on actual work right now...

gv1

17-10-2013, 01:02 PM

I wonder where its going to stop.. next sell is 24.50

Everwood

17-10-2013, 01:08 PM

Very hard to focus on actual work right now...

I'm also finding it hard to focus on work. I keep on clicking the refresh button every couple of minutes.

David Hardman

17-10-2013, 01:27 PM

very interesting case study thats for certain, Angel rounds, series A, B, C, VC rounds, some up some down, and all played out on the NZX.

Thats exactly right. Typically companies like Xero don't get listed so early and these sorts of gains are reserved for the VC's. These "revaluations" normally occur off market and not in public.

I've been in from day 1 of their ASX listing. I was always keen on Xero from day 1 of their NZX listing but could not be bothered with the hassle of funding my dormant NZ broking account. Ugh. Still, i've enjoyed the run up from $4.50.

Payroll will be a big kicker for the US sales. Its been a massive project for them. They have had to consider each states different tax treatment. 50 version of the payroll module...

That said as a user of Xero i'd like to see them focus on some of the glaring basic functionality that is still missing - ie multiple contacts on invoices, better recurring invoices etc. Real simple stuff which the existing client base has been screaming out for (for years!). Instead they've ignored these requests in favour of bigger growth opportunities....which as a shareholder I support.

Shore

17-10-2013, 01:41 PM

Yes I've seen a growing underbelly of angst from some partners about basic funcionality missing from the software... and I'm really not sure what the delay on purchase orders has been about. But Xero have made the decision to commit resource to getting the big things right (AUS tax filing, US payroll etc) - these items are game changers. It's clear that they need more development resource... hopefully with the new capital they can confidently go to market and fill this out and get cracking on these missing features.

Shore

17-10-2013, 01:44 PM

It is infinitely more in my favour right now to leave the office and walk the streets handing out Xero flyers.

David Hardman

17-10-2013, 01:54 PM

These are the most popular feature requests from their users

https://community.xero.com/business/topic/23/1/votes

The most requested features have been open for 1+ years and looking from the outside are not technically challenging to complete.

Regarding developers. Xero is built on top of Microsoft technologies. I believe this is a major impediment for attracting good talent. Very few "rockstar" developers are going to attracted when they run on a MS stack.

Its far too late now.. but I think their technology choices could be the one major thorn in their side.

Toasty

17-10-2013, 02:09 PM

It is infinitely more in my favour right now to leave the office and walk the streets handing out Xero flyers.

Exactly right. I have made 6 months after tax salary in the last three days. It hardly seems worth coming to work.

I don't like all the euphoric talk but it is hard to stay grounded when this is all going on...

David Hardman

17-10-2013, 02:11 PM

Exactly right. I have made 6 months after tax salary in the last three days. It hardly seems worth coming to work.

I don't like all the euphoric talk but it is hard to stay grounded when this is all going on...

Lets hope Rod is a bit more focussed :P

He'll be knighted if this continues....

Shore

17-10-2013, 02:15 PM

yeah it's very hard.. i've made a house this week.. of course.. i'd have to sell up to realize those gains.. and it'll dip back down there's no doubt.. but one does feel very celebratory.

David Hardman

17-10-2013, 02:34 PM

Comparatively big volumes done in Australia today.

XRO could easily force itself into the ASX200 next qtly review. Market cap not an issue. Just got to pass the free float/liquidity rules.

Fundies forced to buy or at least have a mandate to hold...

Bilbo

17-10-2013, 02:34 PM

yeah it's very hard.. i've made a house this week.. of course.. i'd have to sell up to realize those gains.. and it'll dip back down there's no doubt.. but one does feel very celebratory.

Shore, Is that a house in Auckland or one in Invercargill ;) Definitely been some large paper fortunes made this week, but I can't help but feel this is just the start if Xero execute well from this position. This has been an extraordinary opportunity to invest before and alongside some of the best VC firms in the world. Not often small NZ investors get a chance to do that. I am surprised that Lance Wiggs struggled to raise $5m for his early stage fund as that looked like an opportunity to have a little punt on the next tech success stories.

Shore

17-10-2013, 02:38 PM

Is that a house in Auckland or one in Invercargill

Won't get into the nitty gritty details ;)

Just got to pass the free float/liquidity rules.

David - do you know what those liquidity rules are to break into the ASX200?

Shore

17-10-2013, 02:41 PM

David Hardman

17-10-2013, 02:44 PM

Lifted from http://www.asx200.com/about/

A security must meet certain criteria to be eligible for inclusion in the S&P/ASX 200 index.

1 – Eligibility
A security must be listed on the ASX, and must be an ordinary or preferred equity stock (e.g. no bonds, warrants or convertible stocks).

2 – Market Capitalisation
A security must be of adequate size to be considered institutionally investable. The size criterion used for the S&P/ASX 200, is based on the average daily market capitalisation of a security for the previous six months. When this figure is compared to its peers, a security must meet an arbitrary minimum ranking benchmark.

3 – Investable Weight Factor (IWF)
Securities carry different weights in an index depending on their size (i.e. the size of a company directly correlates to the impact it will have in the movement of an index). The influence a stock has on the underlying index is dependant on its IVF. The IVF is the float-adjusted portion of a company’s equity. Therefore, shares owned by company founders, directors, government agencies, or any “strategic holdings” (e.g. longer-term holders with greater than 5% of issued shares) are excluded from the IVF.

4 – Liquidity
A securities liquidity is measured not in absolute terms, but relative to its peers. The formula used is:

RELATIVE LIQUIDITY = STOCK MEDIAN LIQUIDITY / MARKET LIQUIDITY

Where:

Stock Median Liquidity is the median daily traded value of a stock, divided by its average weight-adjusted market capitalisation for the previous six months.

Market Liquidity is the market capitalisation weighted average of the Stock Median Liquidity for the 200 constituents.

Note: The above criteria are used for inclusion into the index, and not for continued membership. As low index turnover is important, a security in the index may on occasions violate one or more of the selection criteria without being removed.

17-10-2013, 02:45 PM

I think the XRO board will be watching this response to the capital raise and be accelerating their US listing plans (if they weren't accelerated already). I know they said US$100m is the number they wanted.. but now I'm pretty sure they are going to line themselves up as soon as that number comes into view. I think a NASDAQ profile and listing would cement the company in the USA - it's a marketing strategy as much as anything else.The $100m target is the requirement to get onto the big board of the NASDAQ (from memory), otherwise they end up on the smaller board - ie like the difference between the NZX and NZAX. The threshold is lower for profitable companies which is why DIL can look to list before hitting that target.

Shore

17-10-2013, 02:48 PM

Oh ok - didn't know it was an actual requirement.. thought it was more something they wanted to achieve so that they could list with some credibility & weight behind them.

Toasty

17-10-2013, 02:51 PM

What happens to the NZX and ASX listings if a NASDAQ listing happens? Noob question?

apac

17-10-2013, 02:52 PM

Anyone want to guess what it will close at today? And tomorrow? My guess 2550 today 2620 tomorrow

apac

17-10-2013, 02:53 PM

A more interesting one would be what will it drop to next week if it drops.

bobxia

17-10-2013, 02:53 PM

i can't concentrate on my work at all, so just play with my calculator.Salesforce has 3.5b annual revenue, 31b market cap (not making profit yet). Xro has 100m revenue (roughly), and 3b mkt. cap. So if xro's revenue is doubling every year, in 5 year it's 100x2x2x2x2x2=3.2b.This is suggesting mkt cap to be around 30b in 5 years, and therefore SP $250. Discount that by 20% p.a. to today, so it's worth $100 now.This is only for entertaining purpose.

Shore

17-10-2013, 02:56 PM

@apac - yes interesting to know what the new floor will be. at first i thought $18.15.. but then forbarr have gone out there and said $20.30 (which in itself is meaningless but its a number)... but with all this volume and the price going up and up.. its begs the question whether the floor will become $3b ($23.50)? until the next set of news that is..

apac

17-10-2013, 02:59 PM

@Shore We could be still below floor. Congrats on making a house this week. I've made a car not too bad either

Toasty

17-10-2013, 03:00 PM

Share price may be climbing but the productivity loss to the country is probably immense. The GDP will show a massive drop for the last three days and shareholders refresh their screens and play with their calculators. Apparently its now worth $100. I read it somewhere. Gospel!

"Discount that by 20% p.a. to today, so it's worth $100 now."

Back to my question. What happens to the NZX and ASX listings if a NASDAQ listing happens? Noob question?

Shore

17-10-2013, 03:00 PM

Thanks @apac congrats to you too. Here's to a few more huh?

Toasty

17-10-2013, 03:03 PM

Share price may be climbing but the productivity loss to the country is probably immense. The GDP will show a massive drop for the last three days and shareholders refresh their screens and play with their calculators.

In other news. Apparently its now worth $100. I read it somewhere. Gospel!

"Discount that by 20% p.a. to today, so it's worth $100 now."

Back to my question. What happens to the NZX and ASX listings if a NASDAQ listing happens? Noob question?

apac

17-10-2013, 03:04 PM

Who uses calculators these days we use xero to calculate xero's value

golden city

17-10-2013, 03:06 PM

this is crazy., price up to 25 dollar today..., how to justify that price....

jamiec26

17-10-2013, 03:08 PM

All of this has revitalised my interest in the Punakaiki Fund... The next XRO could be in there..

Stranger_Danger

17-10-2013, 03:08 PM

Who uses calculators these days we use xero to calculate xero's value

Which feature does that? Can you point me in the right direction - I haven't seen a DCF calculator or similar inside Xero?

zs_cecil

17-10-2013, 03:09 PM

apac

17-10-2013, 03:10 PM

I still remember when it went over $10 I predicted it would go over $15 in a month and it did. And it hasn't gone up that fast again, until this week. Over $5 or 25% in 4 days.

17-10-2013, 04:05 PM

NZ hearld gets it wrong: http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11141763

To quote since they will probably change it:

Cloud accounting software provider Xero is on the cusp of becoming a $3 billion company.

After opening at $22.10 this morning, shares in the Wellington-based firm surged 14 per cent to hit $25.20 this afternoon, valuing the business at $2.96 billion.Oops - forgot the news shares issued.

Shore

17-10-2013, 04:09 PM

Yeah it seems everybody is reporting it wrong... and I do wonder if the market has too, pushing that price higher and higher to that $3b target when in fact it has already reached it....

Food4Thought

17-10-2013, 04:09 PM

Realistically... are they worth anywhere near this? I don't want them to pop how ever... as with their share price growth... comes a whole lot of air that is helping many other share values increase too... could we be getting close to a NZX crash if they go down down down... (I'm happy for everyone who bought into this company and has made incredibly amazing returns.... wish I had)

born2invest

17-10-2013, 04:15 PM

How do you value a company that doesn't make any profit or provide you with cashflows?

This is the "too hard basket" for me.

Dentie

17-10-2013, 04:19 PM

apac

17-10-2013, 04:21 PM

So how many shares are out there? Direct broking says Total Issue: 117,606,203 is that excluding the new shares issued

17-10-2013, 04:22 PM

Yeah it seems everybody is reporting it wrong... and I do wonder if the market has too, pushing that price higher and higher to that $3b target when in fact it has already reached it....It doesn't help the NZX hasn't updated their website. You can understand Google finance being a day or so behind.

Food4Thought

17-10-2013, 04:22 PM

My God, if PEB is riding high on the coat tails of XRO and not on its own value ... we're all in the crap.

You are too right there Dentie... this kind of madness must mean something serious is about to come down dive bomb style. *fingers crossed it is not an Air NZ plane*

17-10-2013, 04:25 PM

So how many shares are out there? Direct broking says Total Issue: 117,606,203 is that excluding the new shares issuedyes
Maybe because the new shares were only technically issued today?

Wolf

17-10-2013, 04:50 PM

Haha all this week i've been thinking about buying some but keep going "Nah it's gonna fall the second i buy some" i might take a $5000 punt tomorrow morning depending on how i like the depth.

Copper

17-10-2013, 05:05 PM

You do realise what percentage of the NZX PEB and XRO make up right?

Moosie ..Can you chart this lot in any way.Do you have a blue sky chart or similar....Even the brokers act like auditors and can only base their predictions on facts.All this is hypothetical and almost guesswork....

Ginger_steps_

17-10-2013, 05:07 PM

What happens to the NZX and ASX listings if a NASDAQ listing happens? Noob question?

Ill second that - can anyone shed light on what happens in the event of a NASDAQ listing??

Hawkeye

17-10-2013, 11:01 PM

Ill second that - can anyone shed light on what happens in the event of a NASDAQ listing??

I asked a similar question in post #2404, and got no reply, perhaps the people who read my comment didn't know, ill go ask my broker if we haven't had a reply by next week and post up his answer on here.

Everwood

17-10-2013, 11:34 PM

A big congratulations needs to go Rod Drury who has been named EY Entrepreneur of the Year and will represent New Zealand in the EY Global Entrepreneur of the Year awards in Monaco next year.

http://www.stuff.co.nz/business/bett...epreneur-prize (http://www.stuff.co.nz/business/better-business/9295899/Xero-founder-Rod-Drury-takes-entrepreneur-prize)

winner69

18-10-2013, 01:57 AM

With all this buying (from Asia) whose selling?

Dentie

18-10-2013, 07:05 AM

You do realise what percentage of the NZX PEB and XRO make up right?

M... Given how quickly the "market cap" of XRO is changing on an intraday basis ... the % changes quicker than my fingers can hit the calculator buttons.

To me at least, the "market cap" is heading northwards due only to the rate of how quickly and how much traders (investors?) are prepared to swap shares for $$$. Its appears to be a competition to see who has the deeper pockets.

People appear to be caught up in the market fervour of this stock and the whirlpool of narrative and chatter being created by interested parties. IMO the current pricing is extremely far ahead of what the true value is and is obviously being based on what people perceive XRO's future trading results MIGHT be (what - in 10 years time??). In the cold light of day however, the financial fundamentals for me are just not there .... look at the trading account & balance sheet. Its all very well to be funded by equity, but at some point this baby is going to have to be funded by its own trading ability and the results of that is going to have to extend onto the balance sheet. I do not believe the excuse that they are foregoing profit for market share. When are they predicting dividends will start to be paid to their keen shareholders who are currently forking out $25 per share? Or are those shareholders just waiting for the price to go to $30 to get their ROI??

Having said all that - it is a great product and I certainly take my hat off to Rod etc. but the current pricing of $25 per share is sheer lunacy in my mind. Maybe when they have a balance sheet and trading results like eg Ryman it will justify the bigger SP, but they are currently losing $14m per annum on a turnover of only $39m. The only tangible asset is $200m cash - provided not through trading. I am just hoping this craziness doesn't start affecting the rest of the NZX. I repeat, if that happens, we are all in the poop!

Oooopppss... sorry Moosie - you did ask.

blackcap

18-10-2013, 07:52 AM

all good dentie, I tend to agree apart from taking the NZX with it. the mCap is so far forward looking its incredible. it is past my buy back price so I am out for the foreseeable future, but traders being ijits could easily pump it even higher. trading money for the sake of trading money really, with a listed vehicle to do it. I think traders are also going nuts over XRO because the entire market over in Oz is currently risk-on for growth stocks, even if they aren't making money! it has all the hallmarks of the last stages of a bubble, but I'm not calling it that as you can only see bubbles in hindsight unfortunately!

rod named entrepreuner of the year, over $3B market cap, guaranteed uptrend everyday. looking a bit peaky eh???

good luck to those buying today, I have other stocks in mind with less risk and more upside potential. when a 27 year old trader tells you even he isn't touching the stock again, take note!

I would never have believed it.... Moosie the voice of reason. But I actually agree 100% with your post there Moosie. Yes XRO could easily go to $50 or whatever figure one wants to put on it. This is driven purely by hype. I have seen this sort of thing before and know it will blow up at some stage and when it does... ouch.
Dentie... that is scary. did not know their revenue was that low. I assumed turnover was in the range of $200-$400 to justify such huge premiums. This just makes the current price super ridiculous.

Dentie

18-10-2013, 07:58 AM

"trading money for the sake of trading money really, with a listed vehicle to do it"

Perhaps they are ex-Forex traders moosie ... Dangerous when movements in a SP are quicker than movements in a Currency. Equities are a different animal though, which actually need to have a tangible backing to be ultimately successful. Perhaps it's just a case of Kiwi's transferring their NZ SP paper wealth into real paper USD (which I note have been dropping against the NZD). So, nothing wrong with transferring the great risk from NZ to the US!

Let's see where it goes today....

Dentie

18-10-2013, 08:05 AM

I would never have believed it.... Moosie the voice of reason. But I actually agree 100% with your post there Moosie. Yes XRO could easily go to $50 or whatever figure one wants to put on it. This is driven purely by hype. I have seen this sort of thing before and know it will blow up at some stage and when it does... ouch.
Dentie... that is scary. did not know their revenue was that low. I assumed turnover was in the range of $200-$400 to justify such huge premiums. This just makes the current price super ridiculous.

Yes BC ... plenty of new customers (because its a good product) BUT seems to me if they want to start making a decent NPAT, they will need to increase the price of the product. Perhaps the plan..... focus on market share (because they have to - due to the low price of the product) and then use that market dominance to increase the prices. Sort of like Microsoft's model. For example, used to be able to buy the Microsoft Office as an application (ie - pay once) but now, for new MS Office it is all in the cloud and, of course, an annual subscription now applies ...

Mind you, it might also be once they have the product (Xero) in final form, they will ditch the expensive IT experts

Toasty

18-10-2013, 08:19 AM

What is the likelihood of a takeover? They are clearly poised to do some damage to Intuit. Whats it worth to them to take them out of play? The value is probably starting to scream out of reach but say 4 billion for such a company is not that much in some respects...

shoe54

18-10-2013, 08:51 AM

These are the most popular feature requests from their users

Regarding developers. Xero is built on top of Microsoft technologies. I believe this is a major impediment for attracting good talent. Very few "rockstar" developers are going to attracted when they run on a MS stack.

Its far too late now.. but I think their technology choices could be the one major thorn in their side.

I think Xero are doing a great job of recruiting top talent and are doing it aggressively to put in the final remaining core accounting features. They have been recruiting heavily the past year and will be into it the coming year as well. I don't think running MS technologies is as much of a factor for developers looking to join a company as other criteria such as company culture.

gv1

18-10-2013, 09:29 AM

I was the same but after reading some infor , USA based. I started watching SP movements, I think there will be lot of interest from USA coming or already started. It might get to more crazy price because this stock has broken the barriers. Why people buy microsoft etc beause they have something special about them BUT you do the maths and invest wisely.

Stranger_Danger

18-10-2013, 09:40 AM

Mind you, it might also be once they have the product (Xero) in final form, they will ditch the expensive IT experts

There is no such thing as final form. Software is never finished.

18-10-2013, 09:41 AM

Ill second that - can anyone shed light on what happens in the event of a NASDAQ listing??No idea.

I assume it would be a secondary listing (tertiary listing since already listed on the ASX or would they end this????) as I dont think they would want to end their NZX affiliation - Rod has been very clear he wants to build a large NZ company. This is different to DIL which I think will cut and run which will mean it doesn't hjave to comply with NZ reporting standards as well as the US ones (lets face it, they do struggle).

NASDAQ listing should add a lot more liquidity as it gives easy access to US investors wanting in. US investors are more accepting of high risk, high growth companys the NZ (or maybe its just the larger population - either way, more potential investors by number)

What will it do to the price - some would argue it will push it up as the US value SaaS businesses higher but I think Xero is already trading on US metrics.

gv1

18-10-2013, 09:42 AM

Hi turmeric,
I missed out on $20 something, bought in ASX same day. Bought some again yesterday at $23 NZX. Oh yeah done not too bad, I guess.

gv1

18-10-2013, 09:50 AM

I have never seen a stock trade in such a large range that was completely outside the Bollinger Bands for the entire day (yesterday)!

Thats what happens when o'seas funds comes, I guess Moosie.

Dentie

18-10-2013, 09:56 AM

Dentie (et al),

I'm wondering if you have ever stopped to think you might be wrong? or at the very least your valuation methods might not be up to play with these types of companies? I respect your opinions and can understand that such an investment opportunity might not be for you. However, it seems to me you have a very long track record of getting Xero completely wrong....right?? For example Dentie you are on record at least as far back as when XRO was $7 effectively saying the exact same things; Xero is overvalued, the bubble is going to burst, blah blah blah....you know the usual comments we have all heard for some time now re XRO. Yet $7 has turned into $25 and along the way XRO has reached all sorts of milestones including significant US investors investing $147m at $18.

So you I guess one question you might want to ask yourself is how do you reconcile all these events which have transpired with your own views? I'm not sure you will be able to and therefore at the very least you would have to concede that at $7 you simply got it wrong....and if that's the case then surely you might want to ask yourself have you still got it wrong now?

Just chucking that out there ;)

Hi again Turmeric. Everytime I hit the 'puter keys I wonder if I am wrong - but I'm well past worrying about whether other's think I'm wrong. Luckily in NZ our opinions are free and we're entitled to have them - whether they're wrong ... or not! I do admire your ardent defence of XRO though, as I'm sure they do.

When you ask about whether my "valuation methods might not be up to play with these types of companies", I presume you are meaning high tech companies that have a website address ending in .com? Oh, I'm old enough to remember how a lot of similar sounding companies were being valued back in those days too. Actually, not being a "techie" myself, I've often wondered why a fantastic NZ company like XRO doesn't have a .co.nz address.

At the end of the day T. I don't hold XRO (never have & never will) and I have no problem that I have missed out on all the gains people like yourself have made either. All power to you though and I sincerely hope it continues for you all! I simply don't get involved in a business I don't know about - or can't value by my own criteria.

gv1

18-10-2013, 10:06 AM

$30 doesn't look to..o far away. Just checked DB site not many sellers.

bobxia

18-10-2013, 10:06 AM

"I simply don't get involved in a business I don't know about"
Hi Dentie, why you keep commenting on something that you don't know about? Are you just wasting your time here?

Toasty

18-10-2013, 10:15 AM

"I simply don't get involved in a business I don't know about"
Hi Dentie, why you keep commenting on something that you don't know about? Are you just wasting your time here?

I think its good to have all viewpoints even if you aren't involved. A considered opinion is always welcome unlike some of the tossers who comment on the NBR articles.

Toasty

18-10-2013, 10:28 AM

A quick share valuation based on the last few days. Its my new methodology. Roughly 40 trading days left for the year at approx. $1.50 per share rise per day equals a share price of around about $86 by the end of the year.

I just cleaned my monitor so I may have inhaled the cleaner fumes.

gv1

18-10-2013, 10:33 AM

You are in the money Toasty.
I'd happy with forty. thanks

gv1

18-10-2013, 10:39 AM

Hi turmeric did you get in your trading account, or are you waiting for drop in price.

Shore

18-10-2013, 10:44 AM

Shocked at the demand for this. I always knew the rest of the world would catch on.. but I didn't think it wouldn't happen this early or this fast.

Shore

18-10-2013, 10:48 AM

@surfersteve - by that reasoning why is Twitter about to list at a US$10b valuation when it's just a SQL db backend storing textual data? what's the big deal about that?

Toasty

18-10-2013, 10:54 AM

$40?

westpac is a bank with profits in the billions?

$86?

Ok now tell me how you get these numbers?

i cant believe my screen at over $26

now im kicking myself for not privately buying at 13.50 when i played with the idea...

But $86?

now toasty your an accountant this is no IBM

there is no watson here

this is a JS HMTL5 - prehaps some C# and SQl backend system...

pretty much the same as everyone else ...

in five years there might be tools that let small team knock this stuff out like in 5 months...

Windev does this already and is used by a lot of fortune 500 companies

It has over 100,000 developers world wide...

its a french product making inroad into the USA and asia

you could knock up a xero accoutning product with windev anytime ....

so right now i would seriosuly consider selling all your shares if it gets to $40 dollars ....

westpac over $38 this morning...

now westpac is share we regularly trade but not for another six months when the aussi$ is stable...

To trade large amounts of money we pick stocks that are solid

you still cant call this a rock solid trading stock

its got over 180 million in the bank... but thats all cash burn now ....

Its ok Steve. I was only joking.

But I am amazed at the speed of the climb. While I can appreciate the big picture the price is still incredible. I don't think its too much of a leap of faith to think that a big player would pay $40 a share to take it out, depending on how big a threat they perceive it to be.

Cricketfan

18-10-2013, 11:08 AM

surfersteve, for someone so tech savvy, I'm surprised you don't know how to quote properly in vbForums!

Shore

18-10-2013, 11:10 AM

It's all about perspective. When a US tech fund looks at Xero they see a well designed product and a well-led company that can address an empty market in virtually every country on the planet. Accounting, income going in and out, simple as it may be, is the bedrock of any business. If Xero can fill that void in this new post-desktop age, then arguably they could become the most valuable company in the world for small-medium businesses. When those overseas investors study Xero, that's what they see... they look at Salesforce, they look at Workday and Netsuite etc.. and they compare growth rates and mCaps and they see a big opportunity. What they don't do is look at the share price and compare it to SkyCity or Vector and get jittery about value compared to those stocks. The only people comparing Xero to NZX stocks are NZ'ers. The funding at $18.25 should have put a line in the sand on those problems and force people to recognize Xero as a global tech company, but still it seems some people are intent on comparing financial metrics with our local small exchange. It's a pointless exercise IMHO.

18-10-2013, 11:15 AM

surfersteve, for someone so tech savvy, I'm surprised you don't know how to quote properly in vbForums!Burn......

Shore

18-10-2013, 11:19 AM

bought in the $3's surfersteve. ten years is a long, long time in this digital world.. who knows what the market will look like then for any of the major tech companies (facebook, google etc).. 10 years ago facebook didn't exist.

gv1

18-10-2013, 11:21 AM

Hi Shore, I agree its a global company and you have to think globally. Can't be confined to NZ thinking.

It's all about perspective. When a US tech fund looks at Xero they see a well designed product and a well-led company that can address an empty market in virtually every country on the planet. Accounting, income going in and out, simple as it may be, is the bedrock of any business. If Xero can fill that void in this new post-desktop age, then arguably they could become the most valuable company in the world for small-medium businesses. When those overseas investors study Xero, that's what they see... they look at Salesforce, they look at Workday and Netsuite etc.. and they compare growth rates and mCaps and they see a big opportunity. What they don't do is look at the share price and compare it to SkyCity or Vector and get jittery about value compared to those stocks. The only people comparing Xero to NZX stocks are NZ'ers. The funding at $18.25 should have put a line in the sand on those problems and force people to recognize Xero as a global tech company, but still it seems some people are intent on comparing financial metrics with our local small exchange. It's a pointless exercise IMHO.

gv1

18-10-2013, 11:23 AM

Shore

18-10-2013, 11:26 AM

@gv1 - i'll keep it under my hat for now. might disclose when i finally sell!

gv1

18-10-2013, 11:26 AM

Might have bigger run after ASX open..

gv1

18-10-2013, 11:27 AM

@gv1 - i'll keep it under my hat for now. might disclose when i finally sell!
Cheers mate, all the best.

Everwood

18-10-2013, 11:28 AM

I'm not getting much work done today. I've been blown away with the price increase since Monday.

GRIFFIN

18-10-2013, 11:31 AM

Once upon a time brokers would express its time for a healthy correction or is that very old school.

Shore

18-10-2013, 11:34 AM

I think this is a major week for Xero.. I expected their 'coming of age' would happen when they started posting decent numbers in the US and began murmurings of their listing there.. but it seems the global market has recognized Xero right now and is leaping in behind it. This is certainly the next level for this company.

Cricketfan

18-10-2013, 11:39 AM

blackcap

"I'm surprised you don't know how to quote properly in vbForums!"

i suppose i come from the age where all that extra html just makes me ....

Understandable? Easy to read? In context?

Bilbo

18-10-2013, 12:09 PM

MASSIVE darkpool trades going through now...

How do you see that?

blackcap

18-10-2013, 12:11 PM

blackcap
"I'm surprised you don't know how to quote properly in vbForums!"
...

You really had me confused for a bit there surfersteve... until I realised you probably meant blackcap80 not to be confused with me :)

Toasty

18-10-2013, 12:13 PM

MASSIVE darkpool trades going through now...

By darkpool you mean off market? Darkpool sounds kind of scary...

Schrodinger

18-10-2013, 12:13 PM

WTF... this is starting to look like 1987 in a good way.

gv1

18-10-2013, 12:19 PM

Darkpools, funds overseas. Saw someone sold at 2681, but big trades went at $27. Still more steam in it..

tunsbro

18-10-2013, 12:42 PM

Ill second that - can anyone shed light on what happens in the event of a NASDAQ listing??
Not sure if this has been answered elsewhere but IMO it would most likely list in the form of level 2 ADRs (American Depository Receipts). Appointed market makers would have to buy off NZX to add liquidity to NASDAQ (and buy and sell between the 2 to manage Forex and demand to minimise arbitrage.)

gv1

18-10-2013, 12:43 PM

Cascade of sellers now. Might be the stampede downwards now!
scare tactics for the faint hearted.

blobbles

18-10-2013, 01:12 PM

I think Xero are doing a great job of recruiting top talent and are doing it aggressively to put in the final remaining core accounting features. They have been recruiting heavily the past year and will be into it the coming year as well. I don't think running MS technologies is as much of a factor for developers looking to join a company as other criteria such as company culture.

Understandable? Easy to read? In context?

All these comments of not using Microsoft for major systems make me laugh. Their enterprise products are just as good as other companies, just as scalable and have the benefit of having cheaper and more plentiful developers. It may have been the case a decade ago to not use Microsoft tech if you wanted to go large, but not today.

Having worked for 2 of the big 4 banks in NZ, they both use Microsoft tech, particularly SQL Server, in a big way. Not for their core banking systems, which is usually proprietary database and interface tech anyway to make it hard to hack. Products like SAP can run on SQL Server or other database platforms easily and I have seen this in large multinational companies.

Really if you can't succeed using Microsoft tech, it's not the techs fault...

Lorne Ranger

18-10-2013, 01:24 PM

Trader angel says: "Hey, wake-up, it's Friday profit-taking, so will drop a bit more, go on sell sell, you can always buy back in later"

Investment Angel says: "Man, chill, this stock is going stratospheric whatever you do, so just sit back and relaaaax. Try one of these....."

oh the conflict....

warthog

18-10-2013, 02:50 PM

All these comments of not using Microsoft for major systems make me laugh. Their enterprise products are just as good as other companies, just as scalable and have the benefit of having cheaper and more plentiful developers. It may have been the case a decade ago to not use Microsoft tech if you wanted to go large, but not today.

Xero and Trademe are two outliers when it comes to using Microsoft for their main platform. Most other large organisations who have to serve hundreds of thousands or millions of users do not use Microsoft products. They vote with their data.

Don't believe the Hog? Just Google <name of company> and "technology stack" and restrict your results to the last year or so.

Examples: developers.facebook.com/opensource

Having worked for 2 of the big 4 banks in NZ, they both use Microsoft tech, particularly SQL Server, in a big way. Not for their core banking systems, which is usually proprietary database and interface tech anyway to make it hard to hack. Products like SAP can run on SQL Server or other database platforms easily and I have seen this in large multinational companies.

You're not the only one laughing.

Damn right the banks are too sharp to use Microsoft "technologies" (mostly acquired tech, not developed by MSFT) for their important systems, basically because in the scheme of things, it is a security nightmare.

Remember, the NSA gives the US NSA advance knowledge of security exploits many weeks before it gives the same information to its clients. The NSA isn't just a government department, but a whole raft of entities, many of which are private sector. Bottom line: huge exposure.

Microsoft is a dying company. It will take many years to die, but its demise is nearly certain in the Hog's view.

Bilbo

18-10-2013, 03:51 PM

"Xero and Trademe are two outliers when it comes to using Microsoft for their main platform. Most other large organisations who have to serve hundreds of thousands or millions of users do not use Microsoft products. They vote with their data."

MSQL is definitely one of the leading enterprise level DBs and rivals anything Oracle or MySQL do. Once products get to the maturity of these 3 it does not matter much which product you use, but how you implement it. Xero appear to have implemented their chosen technology well, and appear to be a design led company (hopefully back-end as well as front end). Good implementation on any of the reliable technologies will out perform poor implementation on what is supposedly the better technology. I hate the whole platform debate for that reason. Well designed and developed applications on the MS platform are just as good as well designed and developed applications in the open source environment. The main benefit of the open source technologies is upfront cost, but there can be hidden costs. Finding staff in NZ for MS platforms is probably a whole lot easier than open source.

Lorne Ranger

18-10-2013, 05:28 PM

"Xero appear to have implemented their chosen technology well"

well find out.....

when we all have connect to it.....

usually the mess unravels at about that time...

Surfersteve: C'mon man, lighten up! Always good to have a balanced perspective, but seriously?! Prophecising doom and gloom is all very well, but sometimes it just feels like snot in a latte. I get that you're not a fan of the Xero platform, I get that you think that UFB will mean a 5 year old can out-programme them in an afternoon, I get you think Xero is made of Lego. But this week, huge rises, SP unheard of for a NZ company, at least put the paper hat on and smile for the camera or it ruins the xmas picture for everyone else! :p

Lost in space

18-10-2013, 05:44 PM

Surfersteve: C'mon man, lighten up! Always good to have a balanced perspective, but seriously?! Prophecising doom and gloom is all very well, but sometimes it just feels like snot in a latte. I get that you're not a fan of the Xero platform, I get that you think that UFB will mean a 5 year old can out-programme them in an afternoon, I get you think Xero is made of Lego. But this week, huge rises, SP unheard of for a NZ company, at least put the paper hat on and smile for the camera or it ruins the xmas picture for everyone else! :p

What a classic statement Lorne Ranger! :-)

apac

18-10-2013, 06:29 PM

Anyone want to guess what it will close at today? And tomorrow? My guess 2550 today 2620 tomorrow

Ok, I was wrong yesterday and today, but I'm not complaining :).

I think if it hasn't dropped by now, which I thought it would have by yesterday, it's unlikely to have a big drop any time soon. The market probably believe it's worth more than it is now, and we should expect the share to keep rising, even if it's at a slower pace, until it's really "over-valued" (perhaps $40?) and will have a big drop.

Any company can do a lot of things with $180m, but this is Xero we are talking about. A lot of people were confident they could exceed their goals before the capital raise, and now with $180m it will be able to do a lot more in a much shorter timeframe.

The next exciting news will be more management/exec hires, and customer numbers that will blow our minds, which will surprise us more than the share price.

Well done Rod and team.

warthog

19-10-2013, 02:18 PM

apple was a dying company and its now a fashion company with an aweful Development IDE

But ... Steve Jobs.

my linux friends prefer VS everytime ...

Java was a dying language some said and then google released andriod ....

round and round it goes ...

every one gets a turn ...

Nope.
Who is Microsoft's Steve Jobs?
Who is Nokia's Steve Jobs (hint: not Stephen Elsop)
Who is Blackberry's Steve Jobs?

warthog

19-10-2013, 02:21 PM

MSQL is definitely one of the leading enterprise level DBs and rivals anything Oracle or MySQL do. Once products get to the maturity of these 3 it does not matter much which product you use, but how you implement it. Xero appear to have implemented their chosen technology well, and appear to be a design led company (hopefully back-end as well as front end). Good implementation on any of the reliable technologies will out perform poor implementation on what is supposedly the better technology. I hate the whole platform debate for that reason. Well designed and developed applications on the MS platform are just as good as well designed and developed applications in the open source environment. The main benefit of the open source technologies is upfront cost, but there can be hidden costs. Finding staff in NZ for MS platforms is probably a whole lot easier than open source.

Xero is design-led - yes. Why is this critical? Because it's a no-brainer to use, just like (most of) Apple's UX.

Xero is hosted with Rackspace in the US, as far as the Hog knows.

Zaphod

19-10-2013, 05:01 PM

Xero and Trademe are two outliers when it comes to using Microsoft for their main platform. Most other large organisations who have to serve hundreds of thousands or millions of users do not use Microsoft products. They vote with their data.

One of the reasons many startups shun the use of traditional corporate-style solution stacks (like MS technologies) is because they view open source technologies as being innovative solutions and believe that by using these technologies, it will reflect back upon the companies itself as being innovative. These startups then grow to become large corporates using open-source technologies.

Damn right the banks are too sharp to use Microsoft "technologies" (mostly acquired tech, not developed by MSFT) for their important systems, basically because in the scheme of things, it is a security nightmare.

IMO, banks have been locked in by relatively ancient proprietary technologies that we implemented because mainstream alternatives did not yet exist. This has been one reason innovation has been stifled, although arguably they are now strangled by their own policies and procedures, with new non-bank entities such as PayPal now stealing their market-share.

In terms of security, most of the security issues in web-facing software are created as a direct result of human error, whether that be sloppy coding/admin, laziness or not fully understanding the implications of the employed coding methodology from a security perspective.

Which technology stack you chose to implement your product or service should be chosen based on the relatively advantages and disadvantages, with most companies using a mixture of open-source and proprietary types.

Just a slightly alternative viewpoint!

Zaphod

19-10-2013, 05:04 PM

Xero is design-led - yes. Why is this critical? Because it's a no-brainer to use, just like (most of) Apple's UX.

Xero is hosted with Rackspace in the US, as far as the Hog knows.

I completely agree on the UX point - it is a very important factor that has almost always been overlooked by software companies who assume only geeks are using their products.

Yes you're right; Xero is hosted with Rackspace primarily out of the Dallas data centre, but also with some redundancy out of Chicago.

warthog

19-10-2013, 08:32 PM

IMO, banks have been locked in by relatively ancient proprietary technologies that we implemented because mainstream alternatives did not yet exist. This has been one reason innovation has been stifled, although arguably they are now strangled by their own policies and procedures, with new non-bank entities such as PayPal now stealing their market-share.

One of the largest banks in the world the Hog has had dealing with still has systems running on Windows 3.1.

To be fair, on some level, it is pretty impressive that some of these massive IT systems running on legacy platforms, geographically fragmented and distant, even manage to function as a comprehensible system at all.

In terms of security, most of the security issues in web-facing software are created as a direct result of human error, whether that be sloppy coding/admin, laziness or not fully understanding the implications of the employed coding methodology from a security perspective.

Well, that's true of pretty much all technology. But leaking known exploits early to the NSA isn't really human error, unless you classify unethical policy as some sort of error :-)

Banking is ready for disruption.

Lost in space

19-10-2013, 08:49 PM

http://www.stuff.co.nz/business/industries/9302121/Great-expectations-for-Xero

apac

19-10-2013, 09:51 PM

Haha all this week i've been thinking about buying some but keep going "Nah it's gonna fall the second i buy some" i might take a $5000 punt tomorrow morning depending on how i like the depth.

Did u get in wolf?

Wolf

19-10-2013, 10:05 PM

Nah watched it closely but decided against it. Was worried there would be heavy profit taking. If it goes up monday i might buy tuesday haha. Or if i like the depth on monday. Quite happy with PEB atm

apac

19-10-2013, 10:11 PM

So sp went up 50% last week, so if it drops to say 25% above pre-announcement, it's still a 25% gain on paper not bad at all. Would it drop below $18.15 without negative news? I doubt it.

so if your average is below $18.15, your capital should be safe for now.

What would be good, is if the sp doesn't keep rising at ridiculously rate, and just creep up, with some drops less than 1% every now and then. Remember around $8 time, it kept going up without much drop until $15, and even then it only dropped to about $12.

Strategy for holders now, or any time really is to ignore any drops, even if it drops to say $10 for argument sake, and in a few months, it could be back up and even higher. Easier said than done though. There's always the psychological factor - fear and greed.

If there's negative news however then that's a different story. Nobody can predict the future. Can Xero drop to below $1? Absolutely, but not without a good reason though. Can Xero sp go up to over $100? Absolutely, but again not without a good reason.

apac

19-10-2013, 10:12 PM

gv1

19-10-2013, 10:55 PM

Don't be ignorant, if this the one in a life opportunity...do some research.

Wolf

19-10-2013, 11:00 PM

Good on ya. Quite happy with peb too. Got in at 69c, a bit late but still happy. haha me at 70c.

apac

19-10-2013, 11:17 PM

Don't be ignorant, if this the one in a life opportunity...do some research.

Is that comment for me? I'm no expert in shares or company so I rely on what i know from news.

I have emailed rod drury a few times and received an immediate reply and I liked that.

Other than this I invested based on the understanding that I could lose everything so I put in what I'm prepared to lose.

Because I have more interest in my career, I spend more of my time on my job and career, rather than research. Probably spend too much time on sharetrader but it's entertaining and good to share views.

Wolf

20-10-2013, 01:03 PM

apac

20-10-2013, 01:23 PM

Moosie any tips on finding the end of drops and end of uptrends?

My personal view on Xero is there is a hell of alot of empty air in the price but i don't think i or anyone can say if it is going to keep rising or not. As long as the growth keep's increasing as rapidly as it has been it will be fine but one bad quarterly report i believe could see a serious drop. But hell i missed out last week if it's going to keep rising next week i might as well jump on the hot air balloon although i'll be terrified the entire time.

Here's a question. What would be the opportunity cost for VCs to invest in XRO? They could easily invest in something else that will see a good gain for their money. So if XRO just rises to say $30 and stops, I don't think they will bother. Even though their shares are worth a lot now they can't easily get out unlike small retail investors. Not sure if this logic works, but if I was them I will be eyeing a lot more thank double my money. Or I might as well invest in something else that will double my money and that I can easily get out

forest

20-10-2013, 02:52 PM

Anybody would like to guess?

Its possible that XRO will be a very successful company but a lousy investment at present SP levels.

Good luck to XRO holders.

apac

20-10-2013, 03:06 PM

Anybody would like to guess?

Its possible that XRO will be a very successful company but a lousy investment at present SP levels.

Good luck to XRO holders.

That doesn't make sense, your comment implies it is way over valued even assuming it becomes very successful. VC seems to think it's worth $18.15, and if my arguement stands, it should be worth at least $36.30 in the future if they are looking to more than double their money, so I think it would only be a lousy investment at current SP levels if it doesn't become successful. If it's successful the SP should go much much higher.

Minerbarejet

20-10-2013, 03:39 PM

Stock split anyone?

gv1

20-10-2013, 03:41 PM

You might regret selling this one Mossie. sometimes chart are b....

Minerbarejet

20-10-2013, 03:52 PM

no regrets gv1, first rule of stock trading ;)

I banked my profits and am happy :)
Good on you Moosie. Now go buy a whole bunch of PEB and sit on them for two years.:):)
Lol
Miner

gv1

20-10-2013, 04:00 PM

no regrets gv1, first rule of stock trading ;)

I banked my profits and am happy :)
Thanks mate...will talk about this next yr.

Dentie

20-10-2013, 04:03 PM

Anybody would like to guess?

Its possible that XRO will be a very successful company but a lousy investment at present SP levels.

Good luck to XRO holders.

Now, now ...careful Forest...much more comment like that and you'll invoke a riot. They don't like any negative comment on this thread.

blakecb

20-10-2013, 04:25 PM

Minerbarejet

20-10-2013, 05:01 PM

I have pretty much ignored this thread because I can't believe anyone has actually invested in this stock, but there you have it, and good on everyone who has made a good profit trading it upwards. That said, this must be the riskiest investment on the NZX so I hope all you XRO investors know your exit strategy and are going very carefully holding this 4 billion dollar company. Perhaps a few XRO investors would like to check out PEB? It will more than likely turn a profit one day, which is a good upside.
With that day possibly being, as suggested by management, sometime in 2014.
Think about it. Who is going to be first to pay a dividend, xro or peb ?
Who is going to double its share price probably within a year? Xro or Peb
Who is still going to be there in years to come with something under excellent management, an absolutely transparent ethical modus operandi, regular updates, future good dividends and steady growth based on an actual physical, tangible and verifiable results with all sorts of ongoing products in the pipeline. Xro or peb
The only real threat to PEB is a cure for cancer or an improvement on 100% reliability
The new xro has begun,
Have a nice day:)
Miner
Du fond dela grotte

winner69

20-10-2013, 05:32 PM

Stock split anyone?

No way Miner

Google a 1000 bucks

Rod wants to emulate

Why 'cheapen' something valuable .... yanks just love expensive shares

winner69

20-10-2013, 05:41 PM

Market cap 3.4 billion

Soon 1 million customers

Each customer at least $600 a year ($50 a month forever says Rod)

So XRO at 27 bucks only about 5 times sales .... looks cheap to me

zs_cecil

20-10-2013, 05:59 PM

Stock split anyone?
1:10 which I have been always hoping for.

blakecb

20-10-2013, 06:20 PM

Market cap 3.4 billion

Soon 1 million customers

Each customer at least $600 a year ($50 a month forever says Rod)

So XRO at 27 bucks only about 5 times sales .... looks cheap to me

At 27 bucks only about 5 times sales when they get 5 times as many customers as they do now...so about 25 times current sales. You would not want to see growth slow with that cash burn that is for sure.

winner69

20-10-2013, 07:52 PM

it was only last April a lot of nbr readers had a laugh at woodward partners valuation
http://www.nbr.co.nz/xero-nasdaq

Might get there before 2019

Woodward says by 2019 Xero shares could reach $55, valuing the company at $6.4 billion. At that time it predicts Xero will have 4.2 million customers.

winner69

20-10-2013, 07:57 PM

At 27 bucks only about 5 times sales when they get 5 times as many customers as they do now...so about 25 times current sales. You would not want to see growth slow with that cash burn that is for sure.

Must have done our numbers wrong or something

I think somebody said current years sales going to be 80 mill

so current price 43 times sales

Multiples don't matter .... just believe the story blake

winner69

20-10-2013, 09:47 PM

At 27 bucks only about 5 times sales when they get 5 times as many customers as they do now...so about 25 times current sales. You would not want to see growth slow with that cash burn that is for sure.

Apparently the addressable market for XRO products is about 35 to 40 million

20% share is 8 million customers

Long way to go yet

21-10-2013, 08:39 AM

Good update today (files) should help lockin.

Churn more likely to come from customers going out of business than replacing their accounting system.

Toasty

21-10-2013, 09:03 AM

Now, now ...careful Forest...much more comment like that and you'll invoke a riot. They don't like any negative comment on this thread.

Come on Dentie. We don't mind negative comment as long as its supported by an rational argument. I would hate this forum to become the evil twin of the NBR comments section. "Its a Ponzi scheme", " There's gonna be tears...." blah blah...

Obviously positive comment should also be supported by a rational argument too but I must admit even I a long time Xero supporter find it hard to do more than just parrot the story....which I believe in wholeheartedly by the way!

Shore

21-10-2013, 10:06 AM

Predictions for day / week?

tosspot

21-10-2013, 10:23 AM

Predictions for day / week?
I think it will go down some. there will be alot of people with huge profits who have ants in their pants and I think it will stabilize and they will get impatient after a day or 2 because their so used to seeing it fly up

Food4Thought

21-10-2013, 10:24 AM

Predictions for day / week?

I predict $30.50... boringly low compared to Moosie. Then again, who know's what AIR can be baked this week...

Shore

21-10-2013, 10:35 AM

it's only an accounting platform everyone

Disagree completely. With the launch of Files this morning, we're slowly beginning to see Xero spread its wings and transition from just 'accounting software' to a full blown small business platform. The accounting part is just the hub of it... money in, money out.. it's the most important thing to any small business and it's from there that Xero will branch out and start to hook in to all those other peripheral areas.

Toasty

21-10-2013, 10:42 AM

Disagree completely. With the launch of Files this morning, we're slowly beginning to see Xero spread its wings and transition from just 'accounting software' to a full blown small business platform. The accounting part is just the hub of it... money in, money out.. it's the most important thing to any small business and it's from there that Xero will branch out and start to hook in to all those other peripheral areas.

I tend to agree. Xero has signalled its intention to disrupt the banking community as well. Who knows what might happen if they connect Xero directly to the banks and initiated monetary transfers directly from the accounting platform.

Shore

21-10-2013, 10:46 AM

Absolutely. Xero is allowing the possibility of businesses to be interconnected via the web in ways that have never been possible before. Banking 2.0 is one part of it.. and who knows what else is possible and what other industries could be disrupted in the process. It's incredibly exciting.

Shore

21-10-2013, 10:50 AM

Cricketfan

21-10-2013, 10:54 AM

Toasty

21-10-2013, 10:55 AM

In other news - MYOB are having such a tough time of it with customer requests to export their data that they've decided to streamline the process and launch a Xero conversion service. http://www.voxy.co.nz/business/myob-launches-xero-conversion-service/5/171398

Interesting that the source in this article is also a Xero Shop. Aspire Solutions in Wellington.

I can't help but feel a hint of desperation in the article. It could be because I am a pathological Xero supporter but to give away 6 months free seems a touch excessive.

Shore

21-10-2013, 10:57 AM

Shouldn't that be *import* their data (from Xero)?

Yeah i know... havin' a dig. Just ironic that they've titled their press release "MYOB launches Xero conversion service".. was begging to take the piss!

psychic

21-10-2013, 10:59 AM

It converts to MYOB Live ex Xero, I don't think it goes the other way.. ?

Toasty

21-10-2013, 11:05 AM

Just pinged off $27.30. Another all time high. The stock that just keeps giving.....I hope.

Toasty

21-10-2013, 11:11 AM

when the software that sums an invoice, or a trial balance is generic and with "pointers" having been around for twenty years now (i know only a few of you will know what a pointer is).. its just the GUI web interface that is holding up the development of nearly free transaction services.

What your seeing here in the next ten years maybe twenty is the last of the big shop service solutions ...

so ALL these solutions will be dead one day and transaction summary services via XML data definitions will be free...

this is not software driving the research into the creation of the universe...

So who clips the ticket on transactions. Someone has to provide the infrastructure and expect a return from that. I can't see any institution allowing a free service. Someones always collecting somewhere....

warthog

21-10-2013, 11:15 AM

when the software that sums an invoice, or a trial balance is generic and with "pointers" having been around for twenty years now (i know only a few of you will know what a pointer is).. its just the GUI web interface that is holding up the development of nearly free transaction services.

What your seeing here in the next ten years maybe twenty is the last of the big shop service solutions ...

so ALL these solutions will be dead one day and transaction summary services via XML data definitions will be free...

Just as a matter of interest, SurferSteve, have you ever either launched or been party to launching of a business that needs to gain traction, or provide even the most basic of information to large numbers of people on a secure, redundant basis?

Some people pay for things that are available for free elsewhere, albeit on a less convenient basis. One example is water.

Shore

21-10-2013, 11:15 AM

@surfersteve - and all twitter did was allow people to input strings of text less than 140 characters into a db row. all facebook did was allow to add friends and look at their photos. when you reduce anything down to its core components then of course it seems simplistic, but in doing that you also completely negate the network effect and the power and value created when you connect all these people up via the same hub. twitter goes from being a database of text strings to being a service at the centre of a revolution (egypt). you can't simply say 'hardly something you need a million dollars for'.. because if were that easy why is Xero booking large amounts of revenue from people when its competition, who have had years of experience in the accounting industry, couldn't do? don't take offence - i'm sure you know what you're doing from a technical standpoint, but I do hope you have a business head alongside you with whatever venture you're working on.

Lorne Ranger

21-10-2013, 11:59 AM

Thrilled with the Xero product update this morning. I have been asking them for the ability to store files on the site, especially to attach to receivable invoices, for about three years, and what they launched this morning well exceeds that expectation! not claiming any credit (!) just glad its been done as this really helps our workflow.

One more step away from any competition!

warthog

21-10-2013, 01:16 PM

@ surfersteve
I really struggle to understand your posts. I presume it is because I am approaching this technical stuff from a layman's perspective. I'm wondering if you could post a link to your businesses website so I can try to get a sense of where you are coming from? My understanding is you guys are developing/ have developed some kind of alternative software which you believe is where the future is right? Appreciate it.

If the Hog may wade in here in a small way ...

The Hog suspects surfersteve is 30-40 years old with a technical background and sees technology as increasingly akin to oxygen and water in the sense that technology invariably becomes commoditised and this combined with economies of scale and competition results in a lower or very marginal cost.

An example would be broadband and internet performance, or raw processing power (thanks, Mr Moore).

Surfersteve probably has a bit of an altruistic bent, too. He's a fan of technology breaking down barriers and overcoming/disrupting inefficient or closed monopolies or sewn-up markets.

However, he may not appreciate that everything has a more complex route to market than it may appear to observers. "Free" internet data is a way off from where we are now. Some would say always on the horizon, but never here.

Going out on a bit of a limb, but the Hog has been known to do this once in a while.

Apologies to surfersteve in advance if (where?) the Hog is off-target!

Disc.: No XRO holdings currently.

Cricketfan

21-10-2013, 01:43 PM

My view on the whole technology thing is that yes, things will change in the next 10-20 years, as they have done in the last 10-20 years, and what Xero and other companies are doing now may no longer be applicable then, BUT one thing that doesn't change is that the world needs smart people /companies to make use of whatever technology is out there. If Xero can adapt then there's no reason why they can't still be around then, albeit doing things in a different way.

Toasty

22-10-2013, 02:15 PM

Would somebody please take out that last clump of 624 shares at $27.20 so we can get back to the stratospheric behaviour that has now become the new normal?

(and whadda ya know...its gone)

Shore

22-10-2013, 02:23 PM

Run it all the way to 30 baby!

Shore

22-10-2013, 02:25 PM

Toasty

22-10-2013, 02:30 PM

With all the action over at PEB I didn't notice XRO was about to hit a new high ;)

I find Xeros pace glacial so I've been hanging out at PEB where all the cool people are. I'm up 39% in 7 days.

Toasty

22-10-2013, 02:48 PM

I thought their roadshow (just getting underway in both Oz and USA) was simply a seminar with powerpoint slide.. but having seen photos of the Melbourne one coming through it's more like a rolling Xerocon. The SP might benefit greatly in the coming weeks from the energy created by this.

The Xero events tend to be high quality. I imagine its necessary to reinforce the beautiful part of the brand. They have also just released the filing feature that allows you to attach documents to your accounts. In effect making Xero a Doc management system. Great for keeping all those important documents in one place and attached to the line item they relate to.

They also suggested in one of their comments that quotes and purchase orders are imminent. That will probably move a lot of fence sitters so I am hoping for a spike in customer numbers coinciding with that release, not that we will know until more numbers are released.

Trying not to be over exuberant but they are hitting all the right notes.

Shore

22-10-2013, 02:53 PM

I spoke to Rod many many years ago before XRO listed.. and he said accountants have generally never been sold to very well, simply because it's not a glamour industry I suppose. I like that Xero are bringing in a bit of razzle and dazzle and making their partners feel special and making them feel like they too are part of the story.

tunsbro

22-10-2013, 03:30 PM

$31.37 makes XRO a $4b company!
You set 'em up, we'll knock 'em down.

Toasty

22-10-2013, 03:36 PM

You set 'em up, we'll knock 'em down.

Haha. I just got your name! Jeez I'm slow. Took a while when Minor barejet was major barejet too.

Copper

22-10-2013, 03:41 PM

Well that resistance didn't last long!

Moosie...You have to have a giggle.It's like Sorehead going in reverse.....

tunsbro

22-10-2013, 05:15 PM

kiwi_on_OE

23-10-2013, 05:16 AM

Did someone say US market is 30-40m. Whatever the size, how long before most of that market is doing their accounting in the cloud? 10 yrs, 5yrs, 2 yrs?

If Xero aim for 10% of the market I think they'll get squashed because someone will have 50% and will be able to undercut them, out-advertise them etc.

I reckon they've got 2 years to become the big player. If they don't they'll get squashed, (or revert to an Australasia-only company). The alternative is they 'win' and they are an absolutely massive company.

Either way it could be interesting.

Bilbo

23-10-2013, 09:56 AM

Cracked 28.
Months ago at xero conference an insider said this was going to $25. Have to say, I was very skeptical. Should have loaded the boat then and there. Ah well. Sometimes when it's too good to be true, it's still true.

Buy orders at $29 this morning. The sp rose on the ASX after NZX closing yesterday, so looks like some momentum might carry over into today. What does everyone think the SP will do today? I have been expecting it to take a breather, which happened a little on Monday, but I was surprised about the performance yesterday. I assume it was foreign buyers yesterday? Does anyone know where the demand is coming from?

Still a long term holder, but it is getting tempting to take some profits. Problem is, every time I have thought of taking profits I have ended up being very pleased I have resisted.

Bilbo

23-10-2013, 10:04 AM

Buy orders at $29 this morning. The sp rose on the ASX after NZX closing yesterday, so looks like some momentum might carry over into today. What does everyone think the SP will do today? I have been expecting it to take a breather, which happened a little on Monday, but I was surprised about the performance yesterday. I assume it was foreign buyers yesterday? Does anyone know where the demand is coming from?

Still a long term holder, but it is getting tempting to take some profits. Problem is, every time I have thought of taking profits I have ended up being very pleased I have resisted.

Ok, that $29 order got pulled before open. Guess you take those pre opening orders with a grain of salt.

oldmate

23-10-2013, 11:29 AM

Xero just hit $29 yeeha

Beagle

23-10-2013, 11:39 AM

Bubble...waiting to go POP !!

gv1

23-10-2013, 12:56 PM

Bean counters can stay bean counters unless they look outside the square. Sorry I used be one but tasted my freedon from bean counting.

blobbles

23-10-2013, 06:26 PM

Holy moly... $30 broken tomorrow?

Lorne Ranger

23-10-2013, 09:12 PM

Holy moly... $30 broken tomorrow?

Sure why not.

I remember thinking after the first major fall of Xero at about $15 down to $12 that when it got back to that level I would quit it. Never got around to it. Procrastination rules!

BLONDEDIDDY

24-10-2013, 09:34 AM

XRO had a nice little run yesterday after being a little quiet on Tuesday, i wonder what today will bring?

BLONDEDIDDY

24-10-2013, 09:37 AM

I do wonder how many are waiting for the $30 to sell sell sell... You would expect it to hit $30 and trend back a little?

lastmoa

24-10-2013, 09:50 AM

I've given up putting my money where my mouth is in terms of where/when/IF the XRO SP trends back. I got it right a few times in the early days. I.e. at $2.5, $7.7, and $18.65, but since it passed the $8 mark I think I have sold about 4 times and 3 out of 4 times the SP continued to surge ahead. Who knows to be honest....One would think $30 is a psychological barrier and many will look to sell there, however XRO has showed time and time again when it breaks these "resistance points" it breaks through with pace and continues on so presumably there are quite a few that will be ready to buy...

I probably haven't been much help :)

DISC: hold and not looking to sell in the near future.

I am surprised, Tumeric, that you would be buying/selling as the SP fluctuates around. I would have thought that you would have a good grasp on the story and not feel like you need to duck and dive. I use any dips to 'top-up' although right now my tank is full so contented to sit back and follow developments as Xero unrolls the global Xero.

BLONDEDIDDY

24-10-2013, 09:51 AM

Shame i can't find my crystal ball. I am very pessimistic usually but I use XERO software daily, love it and can't recommend it enough to everyone I know, how much more confidence does one need in a product :)

lastmoa

24-10-2013, 09:52 AM

Bubble...waiting to go POP !!

Do we really need unsubstantiated comments on this thread?
We have enough to wade through on a stock threads to find the useful inputs.

lastmoa

24-10-2013, 10:00 AM

Hi Dellow, Other than 2 (small/successful) trades with XRO I have only sold, on what I thought might be peaks, to de-risk and because I've needed some money to pay for my studies (I haven't worked a full time job since 2008). IF income wasn't an issue I believe I would be holding a much larger chunk of XRO, but such is life when you are trying to upgrade your human capital!

Understood, Tumeric. Just couldn't relate your trading action to the intelligent posts you provide to the forum. Now I can and yes, seems sensible. I am in a fortunate position to hold a stock when I believe in it's story. Thus I only accumulate XRO and PEB and try not to pay attention to SP noise.

BLONDEDIDDY

24-10-2013, 10:08 AM

Agreed. A couple days ago I reposted comments from Roger back when the SP was $13, when he was saying the same thing. So go figure.......

By "POP", maybe he is referring to confetti? :P

Toasty

24-10-2013, 10:21 AM

I am pretty sure that Roger is also The Doctor on the NBR comments section. He crops up in all the good shares. PEB and XRO the two most prominent.

winner69

24-10-2013, 10:39 AM

I am pretty sure that Roger is also The Doctor on the NBR comments section. He crops up in all the good shares. PEB and XRO the two most prominent.

Toasty I pretty sure The Doctor from NBR is our old The Doctor
http://www.sharetrader.co.nz/member.php?5470-The-Doctor

So has The Doctor of old morphed into Roger?

Toasty

24-10-2013, 10:43 AM

Toasty I pretty sure The Doctor from NBR is our old The Doctor
http://www.sharetrader.co.nz/member.php?5470-The-Doctor

So has The Doctor of old morphed into Roger?

Classic. I wasn't around when he was posting. I first noticed him on the NBR site. Maybe they are brothers?

BLONDEDIDDY

24-10-2013, 01:12 PM

Seems to be trending down today?

Everwood

24-10-2013, 01:36 PM

Xero has had another interview on Sky News Business
http://blog.xero.com/2013/10/technology-behind-business/

BLONDEDIDDY

24-10-2013, 01:37 PM

This XRO forum was going mental last week, this week... very quiet...

Xerof

24-10-2013, 01:39 PM

So who were you last week? Did you have antlers?

BLONDEDIDDY

24-10-2013, 01:53 PM

What were you expecting? You want all us XRO investors to jump around for joy when the stock price retreats??

Worth remembering that since the capital raise the stock at its high point improved by roughly $11 per share. Todays retreat so far is $1 per share. I'm personally not surprised...

Fair call, apologies.

Everwood

24-10-2013, 02:04 PM

I've just had this on in the background (so need to listen again) but Ridd said they were adding 200-300 customers a day sounds pretty good. Seems that would put YoY customer growth well over 100% still in OZ.

It's good to hear they are growing at 200-300 customers per day in Australia. Rod Drury was quoted as saying "US was now its fastest-growing market."
http://www.stuff.co.nz/business/industries/9149273/Buoyant-Xero-seeking-100-staff

Does that mean they are adding at least 200-300 per day in the United States?

BLONDEDIDDY

24-10-2013, 02:10 PM

All good mate, no need to apologise ;) Do you hold a position in XRO by the way? You said you were an accountant right?

Not an accountant. Just a young man. Yes have a large position in XRO, not sure if I am allowed to say how much on here?

BLONDEDIDDY

24-10-2013, 02:19 PM

Up to you I think....some people choose not to.

Just over 10,000 shares.

BLONDEDIDDY

24-10-2013, 02:20 PM

Oh I see, you said you use Xero and recommend it...I made the leap to thinking you are an accountant...So you have good experiences with the product?

Yea i run my own business and use it every day. It's great, simple, intuitive, mobile... What more can you want? Except maybe if it made my breakfast, that would be swell.

Food4Thought

24-10-2013, 02:23 PM

Not an accountant. Just a young man. Yes have a large position in XRO, not sure if I am allowed to say how much on here?

Personally, I would not disclose my holdings if I held shares. I think that forums like this are a great place to share company information and opinions. Your personal life, is probably best kept personal. You never know whom scours these sights for insight. That is just my own opinion. Well done on your solid investment, that is great to hear you are young and doing well through taking calculated risks. Heaps of life left, do it while you can.

Toasty

24-10-2013, 02:25 PM

Not an accountant. Just a young man. Yes have a large position in XRO, not sure if I am allowed to say how much on here?

Of course you can say. We love knowing the numbers

BLONDEDIDDY

24-10-2013, 02:25 PM

Personally, I would not disclose my holdings if I held shares. I think that forums like this are a great place to share company information and opinions. Your personal life, is probably best kept personal. You never know whom scours these sights for insight. That is just my own opinion. Well done on your solid investment, that is great to hear you are young and doing well through taking calculated risks. Heaps of life left, do it while you can.

If i spent it on a Ferrari instead of XRO shares, people would have more obvious of an insight...

Food4Thought

24-10-2013, 02:32 PM

...and probably a lot more positive attention too...

Goodluck

Toasty

24-10-2013, 02:33 PM

BLONDEDIDDY

24-10-2013, 02:36 PM

Depends on what kind of Ferrari I guess. I could get this one and then sell PEB to pay for the champagne and the repair bill once I drive it into the harbour

http://www.trademe.co.nz/motors/used-cars/ferrari/599/auction-647204517.htm

Toasty, i think if you're going to drive it into the harbour, this would be best: http://www.dvice.com/2013-10-21/elon-musk-turn-james-bond-car-working-submarine.

Then you can keep your PEB...

Everwood

24-10-2013, 02:48 PM

If so I put that at about 350% YoY growth at least in the US come the March numbers report!

Since November 2011 I have been adding up the amount of Accountants & Bookkeepers in New Zealand, Australia, United Kingdom and United States including several other minor countries. It is not a perfect record because Xero does not seem to include everyone on their directory http://www.xero.com/advisors I can only calculate the Accountants & Bookkeepers they have included.

You need to have at least 500 customers using Xero to achieve platinum. Chaney & Associates in United States earlier this month became the first platinum. No one in Australia has reach platinum level, even though they have 81 Gold on 1st October 2013 compared to 33 Gold on October 1st 2012.
Achievement levels

Bronze: 5
Silver: 25
Gold: 100
Platinum: 500

Above achievement levels might have changed at some point. I noted down these achievement levels over 1 year ago.

Bilbo

24-10-2013, 02:58 PM

It's good to hear they are growing at 200-300 customers per day in Australia. Rod Drury was quoted as saying "US was now its fastest-growing market."
http://www.stuff.co.nz/business/industries/9149273/Buoyant-Xero-seeking-100-staff

Does that mean they are adding at least 200-300 per day in the United States?

If so I put that at about 350% YoY growth at least in the US come the March numbers report!

I took Rod's comment about US being the fastest growing market to be in % terms, not absolute numbers. There is a big difference, and it would be nice to get some clarification on the details. It goes to show how you need to be very careful about public comments.

BLONDEDIDDY

24-10-2013, 05:44 PM

Not a bad finish to the day, rallied back a little :)

oldmate

25-10-2013, 11:32 AM

Not a bad finish to the day, rallied back a little :)

It seems to have reached a resistance level which I believe is $30 I am thinking that once it passes $30 it will probably sail through to $40 but I could be wrong.

Toasty

25-10-2013, 12:59 PM

It seems to have reached a resistance level which I believe is $30 I am thinking that once it passes $30 it will probably sail through to $40 but I could be wrong.

I am amazed at how keen I am to believe this.

Silverlight

25-10-2013, 03:43 PM

How does the value investor value Xero at the current price? What E number is needed to justify the current price in the future? How long would you wait for this number?

Intuit is Xero's incumbent in the US market; it trades on a P/E of around 25. Xero is $3.6b odd, so the market forecasts future earnings of $144m. Intuits margins have been quite consistent for the past 5 years, around 20%. Xero $144m earnings on a 20% margin base is $720m in sales.

Average annualised ARPU is $334, so 2.1m customers at $720m in sales. What growth rate over what period is needed to get 2.1m customers? March 2012 NZ growth rate was 20% per quarter, but has now fallen to 8% Xero's 86k representing a 30% market share of the estimated SME market of 250k, in March 2012 this was 12.5%.

US quarter growth in past year has fluctuated between 20%-30%. Potential US SME market of 10m, so Xero grows at current rate (25% quarter, 140% p.a.), for 5 years, would be 2m US customers from today’s 16k, this gets it to 20% market share.
At $40 a share, there has to be higher margins, higher penetration, or higher growth rates.

Paying a lot already for revenues to increase 1000%, and then for these revenues to deliver an operating margin of 20%, but hey, it’s different this time… 

25-10-2013, 03:54 PM

At $40 a share, there has to be higher margins, higher penetration, or higher growth rates.I expect they will have better margins than intuit. Have a look at DIL margins (if you can beleive their revenue figures) to see what is possible with a SaaS model.

Shore

25-10-2013, 03:57 PM

And remember, being a growth company, once they get near to 1 million customers then the marketplace will probably start pricing them in at 10m customers... and so on and so on until it really flattens out.

Silverlight

25-10-2013, 04:09 PM

I expect they will have better margins than intuit. Have a look at DIL margins (if you can beleive their revenue figures) to see what is possible with a SaaS model.

I have not seen anywhere indicating they should have better margins, and I think the current accounting software businesses is the better place to start. I also have not seen Drury once say our margins will be better, they just want market share. Drury's last statement about the capital raising he said "We find talent follows money and talent follows talent ... it's a massive war chest and it means we can hire the very best people".

This says everything about future cost and nothing about profits for shareholders. If anything I would say 20% margins is been generous.

Toasty

25-10-2013, 04:29 PM

Food4Thought

25-10-2013, 06:15 PM

What I have heard, from some friends who went on to study in the discipline of accounting, and now work in this field, is that XERO is amazing, and much better then anything they have used before. It is like a Rock Star of accounting programs. It is user friendly and saving businesses money, as they can do some of the accounting themselves if they choose to. From their enthusiasm, I get a feeling that many people will opt for XERO vs MYOB (are they still in business?), etc etc... XERO could easily keep improving their program and gaining market share. Think about all the New Zealanders who have gone overseas to work, recommending the use of XERO, on top of the sales rep's out there, growing market share. We are probably only in the beginning of what this company will achieve. There are a lot of hard facts and credentials behind the firm.

[Note: wish I would have had money to buy into them 3 years ago when I got the recommendation... ] I hope for all those who hold that the share keeps on growing. Well done.

artemis

26-10-2013, 08:53 AM

Brian Gaynor on Xero today - Xero - bubble or global giant?

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11146424

warthog

26-10-2013, 10:17 AM

I wonder what analysis tools the big players such as Matrix Capital, Peter Thiel, etc are using? They must have pretty significant expectations getting in at $18 and upwards knowing that it would be reasonably difficult to quit their position without causing a collapse of the share price.

They are cornerstone investors.

Their name on the register alone gives XRO credibility and profile.

So to some extent it is a self-fullfilling prophesy.

The pudding will be eaten and dissected in the coming years.

Amazing story, with shareholders believing in the product and ability of Drury and co. to execute.

26-10-2013, 07:40 PM

Brian Gaynor on Xero today - Xero - bubble or global giant?

http://www.nzherald.co.nz/opinion/news/article.cfm?c_id=466&objectid=11146424remember he bought on in the latest placement.

winner69

27-10-2013, 06:15 AM

Damien prob doesn't have XRO shares

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11146917

Shore

27-10-2013, 07:25 AM

Just read that travesty, comparing Xero to 'Microsoft Explorer' and the going on to compare it... yet again as so many NZ journalists are keen to do... To Meridian energy, implying Xero shareholders are greedy because it is losing money when a local utility provider makes $300m profit.

Xero's loss making, growth chasing strategy has just been wholeheartedly endorsed by some of the smartest tech investors in the world and the product is clearly loved by its users, yet the tall poppy syndrome continues by one NZ journalist reducing Xero's SP down to 'greed'.

I don't get why the NZ media are so short sighted and desperate to do anything they can to bring down this company? If Xero were a Silicon Valley company I can guarantee you wouldn't see this dribble being written about it - quite the opposite in fact. Instead, we have to struggle on with the likes of Damien Grant and the NBR....

Shore

27-10-2013, 07:40 AM

GRRR... On further checking I see Damien Grant works in insolvency?? Why do the Herald give people with ZERO tech exposure a soapbox for them to vent their frustration about missing out on the SP action on a subject which he clearly knows nothing about.

brend

27-10-2013, 08:10 AM

Abit of xero bashing.

In all seriousness though - how easy is for someone to copy xeros model? Its just bank feeds.

Compared to MYOB live which has started moving into cloud computing, you still need to install to your desktop.

p.s new to the forums, be easy :)

Shore

27-10-2013, 08:59 AM

It's just bank feeds??

Like Auckland Airport is just a big strip of concrete?

Welcome :)

27-10-2013, 09:10 AM

Just read that travesty, comparing Xero to 'Microsoft Explorer' and the going on to compare it...probably a good comparison. Google chrome is a much better experience than explorer which is why it has gone from 0% market share to 30% market share in less than 10 years. If Xero can do the same, it will be worth 10B+

silverblizzard888

27-10-2013, 09:14 AM

Dentie

27-10-2013, 10:07 AM

Its a bit more beyond bank feeds, it takes bank feeds and turns them into monthly and annual reports if required. For anyone with no accounting knowledge, which is a lot of people, its simple to use software that takes the stress and hassle out of doing your accounts when you can make entries and record every transaction whenever a business wants and from whatever platform like a phone or computer, which is very handle.

What people will pay for convenience, hassle free and saving time. Its sort of a game changer. Its all recorded online too, so no stress that you'll lose the information either. Before that it was either using expensive MYOB software where you need to back things up which its usually software that bigger companies will use, but when your a small to medium business, Xero does the trick. As a study I once did, Xero is great for small and medium businesses, but its a bit limited in key areas like the separation of duties or the security that it can be accessed anywhere. MYOB still has more indepth functions, but is a bit more expensive in that regard to manage. Hope that helps.

I deal daily with SME's and see lots of financial statements (and a lot that are generated by XRO). They are very clean and easy to read although a lot of Accountants still haven't appeared to work out how to generate a breakdown of the shareholders current account for example, so a separate breakdown is almost always required.

The Accountants I talk with who use XRO all swear by the time saving aspect. I note none of them appear to have reduced their fees to their clients however and nearly all of them haven't increased their services to compensate. No wonder they are gravitating to XRO.

Everwood

27-10-2013, 10:27 AM

Damien prob doesn't have XRO shares

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11146917

I would not trust his opinion when he can't even get basic information like customer numbers right. He says Xero has 150,000 customers, but Xero has 211,000 after the most recently update.

silverblizzard888

27-10-2013, 10:27 AM

I deal daily with SME's and see lots of financial statements (and a lot that are generated by XRO). They are very clean and easy to read although a lot of Accountants still haven't appeared to work out how to generate a breakdown of the shareholders current account for example, so a separate breakdown is almost always required.

The Accountants I talk with who use XRO all swear by the time saving aspect. I note none of them appear to have reduced their fees to their clients however and nearly all of them haven't increased their services to compensate. No wonder they are gravitating to XRO.

Yup, there is certainly magic in simplicity. Theres three things most people are always limited in and that is time, money and skills. What Xero does is it save both the user and the accountant time in doing those accounts, which some people don't have the skills or knowledge to understand how exactly they work or what needs to be done. Would you not feel it was a problem if your accountant one day came to you and said hey were missing a few entries for your revenue or expenses, can you find them for me so we can balance the books. You'll be trying to sort through all of that or back in the days when people kept invoices and had to explain themselves (with some difficulty) of what their business did and every single operating cost, which some people only think of the main ones and lapse on the small things that can add up over time. The fact that you can take you bank statements and classify each transaction saves a lot of time and helps you sort and categories. Where time is saved your accountant doesn't need to do that much more work and won't charge you more to do follow ups or make increases in fees because they just don't need to spend that much time on it anymore. Also Xero has a low maintenance cost compared to other pay to user software. With something like that, you really can't deny that its a remarkable piece of software, changing the landscape of the amount of time, skills (which the Xero manuals are very helpful) and money you save.

Stranger_Danger

27-10-2013, 10:33 AM

The Accountants I talk with who use XRO all swear by the time saving aspect. I note none of them appear to have reduced their fees to their clients however and nearly all of them haven't increased their services to compensate. No wonder they are gravitating to XRO.

I've noticed this too. Drury keeps talking to them about value added consulting services etc, and they talk about it, but very few seem to walk the walk. Is an accountant really the best person to go to as a business coach? Really?

I suspect with these cloud services there will be a massive opportunity for companies to offer a "basic compliance" accounting service, with no delusions of grandeur or added consulting, at a cut down price, with almost all of the work being offshored to India or similar.

It wouldn't surprise me if cloud computing ends up being what cuts the average accountants throat. Xero wouldn't care as by then they have their client base, they have the key relationship (the data) and it is no skin off their nose if it ends up being administered by the Indian outsource firm.

silverblizzard888

27-10-2013, 11:05 AM

I've noticed this too. Drury keeps talking to them about value added consulting services etc, and they talk about it, but very few seem to walk the walk. Is an accountant really the best person to go to as a business coach? Really?

I suspect with these cloud services there will be a massive opportunity for companies to offer a "basic compliance" accounting service, with no delusions of grandeur or added consulting, at a cut down price, with almost all of the work being offshored to India or similar.

It wouldn't surprise me if cloud computing ends up being what cuts the average accountants throat. Xero wouldn't care as by then they have their client base, they have the key relationship (the data) and it is no skin off their nose if it ends up being administered by the Indian outsource firm.

Well in the respect of a business coach, I wouldn't say accountants were that far off, they understand the drivers of a business like expenses and revenues so they can advise on possible cost cutting or ways to save money like instead of buying your asset why not rent for more tax incentives and better use of cashflow through not having to spend so much on buying the asset or have to make a loss on revaluation. I'd say the revenue part was harder because its easier for an accountant to cut cost, but I guess it takes a bit of creativity and gut to suggest to a client that they need to do more marketing or that they should low or increase price. Accountants have always been more of the numbers and certainty kind of people. Consultants are like the hippies lol.

With such software it actually does take out a lot of the accounting work, which I guess is a scary thought because when we think of accountants, we usually think of people who are doing out books, but when you can have software and cheaper labour to do it, well develop world accounts would in that regard need to be more consultants than accountants.

Dentie

27-10-2013, 11:09 AM

I've noticed this too. Drury keeps talking to them about value added consulting services etc, and they talk about it, but very few seem to walk the walk. Is an accountant really the best person to go to as a business coach? Really?

I suspect with these cloud services there will be a massive opportunity for companies to offer a "basic compliance" accounting service, with no delusions of grandeur or added consulting, at a cut down price, with almost all of the work being offshored to India or similar.

It wouldn't surprise me if cloud computing ends up being what cuts the average accountants throat. Xero wouldn't care as by then they have their client base, they have the key relationship (the data) and it is no skin off their nose if it ends up being administered by the Indian outsource firm.

You are absolutely bang on here Stranger. There is a reason why they don't "walk the talk" and silverblizzard's last post basically sums it up "...There's three things most people are always limited in and that is time, money and skills."

To be a successful business consultant/coach etc ... you need a lot more than just accounting skills. XRO easily provides the benign type of stuff ... ie - organising historic bank data into the appropriate columns etc. Firstly, there is a skill in interpreting those historic numbers and, secondly, then applying that interpretation correctly from your different client's perspectives (which are not necessarily the same in each case). Thirdly, once you have that done properly, the real test is how to interpret those historic numbers as they relate to future forecasting etc. and finally you then need to impart that knowledge to your client in a way they understand so they can then grow/improve their business.

Although all Accountants will (should!) have the first skill, and many may have the second skill, it has been my experience that not a lot of them have the third or fourth skills (which, to me, are the most important). And that is just the financial side of business consulting!! Indeed, a few of them have admitted they can see - over time, the end of some accounting businesses.

I suppose time will tell.

gv1

27-10-2013, 05:36 PM

As I have mentioned earlier, its a global co, therefore its priced accordingly. I have mentioned few other co's in here and apparently they have performed well. I have a genuine desire to help people to be financially independent. But please also do your our research as well. I was sceptic of PEb as well but I have invested in as well. I believe, that share has lot of potenetial as well.

winner69

28-10-2013, 01:40 AM

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

They gurus then

Toasty

28-10-2013, 10:44 PM

It's just bank feeds??

Like Auckland Airport is just a big strip of concrete?

Welcome :)

Waahahaha. Snorted my coke out my nose (drink)

Toasty

28-10-2013, 10:52 PM

I've noticed this too. Drury keeps talking to them about value added consulting services etc, and they talk about it, but very few seem to walk the walk. Is an accountant really the best person to go to as a business coach? Really?

I suspect with these cloud services there will be a massive opportunity for companies to offer a "basic compliance" accounting service, with no delusions of grandeur or added consulting, at a cut down price, with almost all of the work being offshored to India or similar.

It wouldn't surprise me if cloud computing ends up being what cuts the average accountants throat. Xero wouldn't care as by then they have their client base, they have the key relationship (the data) and it is no skin off their nose if it ends up being administered by the Indian outsource firm.

The main benefit of Xero is that it keeps the Accountant up to date with the clients books in real time. No washing up the inevitable disasters at year end and telling the client to do better next year. The idea is to identify the problems and pluses as they occur and nip them in the bud or capitalise on them at the time.

Quite a few accounting businesses have realised that Xero will likely cut into their compliance revenue as some clients realise that it is getting easier to complete this stuff themselves. As such they are taking on Business Development people to use the data they are accumulating to sell add on services to clients. i.e. business consulting, valuations, target and goal setting, business planning services etc.

Check out some of the websites and you will start to see these services being packaged up in monthly services.

Google Rob Nixon for a quick overview.

Toasty

31-10-2013, 03:38 PM

Hopefully my numbers are good, but the latest cash flow report suggests "receipts from customers" has been ramping up a bit? $15,764,000 last quarter (to Sep 31) up from $12,965,000 in the June quarter.

Percentage increase in receipts from customers this Q therefore is 21.59% vs. 13.91% the previous Q vs 12.51% the Q before that.

Next couple should be interesting!

So hopefully we are going to see a minimum of $60,000,000 in revenue this year and more like $70 million as each quarter customer numbers should be increasing. Then the 2014 financial year should be the time to breach the $100 million, possibly by quite a way if customer acquisition keeps ramping up?

Toasty

01-11-2013, 09:03 AM

Bit of late trading to take the SP back to $28. I wonder how much that has to do with the cash flow report? Anyone else care to shed light on how they viewed the numbers?

I think that it just shows that the strategy is unfolding to plan in the background. If the growth rates continue then the $100 million revenue target that seems to be in peoples minds should be a distant memory in no time at all.

I have always been keen on customer numbers as this is a volume play and I really think that with all the effort going in to the US push and the renewed optimism in the UK that we should push back over the 100% growth rate in the new financial year.

Silverlight

01-11-2013, 03:09 PM

Bit of late trading to take the SP back to $28. I wonder how much that has to do with the cash flow report? Anyone else care to shed light on how they viewed the numbers?

I would be interested in knowing anyone's justification for holding and how they see value. The only reason I still have a small holding is because my momentum model has not told be to sell it yet.

Copper

02-11-2013, 06:50 AM

I would be interested in knowing anyone's justification for holding and how they see value. The only reason I still have a small holding is because my momentum model has not told be to sell it yet.

My reason is the actions of Thiel,Matrix Capital and others .Their research and reputation is far greater than anything else that I have seen. The figures and growth always seem to be catching up but from day one everyone has doubted the possible growth of Xero.Your momentum model is probably as good as anything.Take yesterday's move late,did anyone except the odd canny poster see a buck fifty by end of day.