Xro - xero

[Baa_Baa]

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

[dingoNZ]

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

It will open sub $17.50 this morning

[bull....]

nasdaq smashed last hr looks like only one way today

[Hoop]

Indeed. And just to stir things up as the price drops even further today, he announces he hopes to have employeed another 500 staff in the next 12 months. There is no way he is stopping.

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

[dingoNZ]

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

[Carpenterjoe]

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

[Stranger_Danger]

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

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

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

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

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

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

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

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

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

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

[couta1]

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

[Carpenterjoe]

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

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

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

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

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

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

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

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

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

Stranger,

Your completely right

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

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

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

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

Just my two cents for those nervous about their holdings

[Fisherboy3]

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