I'm just a learner here but, does Spotlight Workpapers being a related entity have any bearing on things?
Printable View
I'm just a learner here but, does Spotlight Workpapers being a related entity have any bearing on things?
Thanks. I had read the blog but did when first posted so missed out on all the following comments. I don't normally go back and re-review.
In other news:
Xero's price has crashed to a level not seen since July 3rd!!
(quote originally referred to Apples recent 'crash' but equally applies here)
The AGM is today isn't it? I'm also wondering if I had missed some awful news. I thought we are expecting some positive news from the AGM. I guess we will see later in the day :)
I dont think much is going on. The Spike in relation to the spotlight acquisition was overstated (a $800k acquistion does not add $50m of value). They had their Australian conference on at the time and I wonder if the accountant there was so high on the kool-aid, they bought at any price for what is in reality a relatively thinly traded stock (their enthusiasm is good for future sign ups though). Then the long term holders decided to lock in some profits having had a 100% over 1 year.
There is probably a bit of uncertainty leading into the AGM as they will announce new customer numbers I assume.
Disc: hold (only a 20% gain as I jumped in too late). I should have locked in the 40% gain at 5.80 and rebought now under $5 but I am not a trader.
I think the recent rise (to to a high of $5.80) was driven by two issues - Xero's entry to the NZX50 (which both gave it added credibility and forced certain funds to buy shares), and the rumour mill (particularly speculation about Peter Thiel's Mithril fund).
As the share has limited liquidity (as most are tightly held by parties close to the company) it will be prone to shooting up on a slight increase in demand.
Countering that is that there are also relatively few buyers for such a high risk stock. So if a small number of parties decide to offload shares it could drop dramatically as has happened this week. My guess is that the Sunday Star Times article freaked a few people out into selling this week and taking a very good profit (http://www.stuff.co.nz/business/opin...bubble-or-hero) .
Even at the current price Xero is hardly cheap based on its fundamentals - so could drop quite a bit further. On the other hand Drury will undoubtedly release some good PR at the AGM this afternoon and the market could calm down again.
Belg : did you sell some or all?
AGM announcement - 100k customers. Up from 78k at prev FY end. Most growth now overseas. At this rate NZ customers might only grow 50% this FY (47k to 70k), and overseas could grow from 31k to 80k maybe, as already about 45k after 4 months of the year. HY targets of 60k NZ customers and 50k overseas (110k in total)? If they then go on to 70k NZ and 80k overseas for the FY (150k in total), revenue could double from previous FY ie. from 19m to 40m (rev from overseas 50% more per customer than NZ too). What will the expenses do? Two years ago 18m, last year 28m, so could it be a linear increase to ~40m? That would have them at about break even.
If at some point they further doubled customer numbers to 300k, with no further growth after that, then revenue would level out at 100m (not 80m as that includes part-year revenue from customers). If expenses went from 40m to 60m, then profit would be 40m, and perhaps a value of 5-600m would be understandable. Will they get to 300k? Will they keep growing after that? How long would it take? Are they too expensive given the possible future outcomes?