A few key points from John Hempton’s Xero blog post.
Your Benefits on Patreon
Links to Sources
Bronte Capital (blog) | http://brontecapital.blogspot.com/2018/08/xero_1.html
Analysis | Increasing Returns and the Two Worlds of Business | https://www.youtube.com/watch?v=7e-u_Ak9ZJY
Xero’s Investor Relations | https://www.xero.com/content/xero/au/about/investors.html
ey guys I want to show you a blog post that John Hempton posted a couple weeks ago saying I felt really insightful and I wanted to show you that it’s about his thoughts on zero. It’s a strain listed company founded in New Zealand. He was he was quoted in The Australian Financial Review that had the potential to become a hundred billion dollar. Global company. And in his blog post he explains the rationale for how he came up with that number. He also deconstructs the company market cap for zeros less than 5 billion US dollars. And he’s saying it could be a 20 bagger. I’m not going to read the full blog post in this video but it will provide you a link in a description so you can read the full one. I recommend you do. It’s a great read. It starts off the boat post explaining here is quoted in this train Financial Review about how he believes it’s a hundred billion dollar company. Has no fewer hoops to jump through on the path. And John says. The 100 billion dollar number was a matter of some dispute in office. However suffice to say there is huge upside. Provided it all works. Zero however has a few hoops to jump through on this path. This post is to explain my view and also why I hope management improves. I do not. I do not think they have done a great job with it so far.
Even though the stock in the business has been a success and it begins with the hinny description of what Zillow is and how it works there is an open architecture cloud based small business accounting software package it provides proper double entry accounting system for small businesses available from any reasonable device and backed up automatically. It has permissions to allow various people different levels of access to facilitate proper accounting controls. And in some jurisdictions it connects straight to the banking systems to our payments be made directly to zero. Say users zero in his own business and that works wonderfully. And he goes on to say that this is not an isolated view. If you look at Twitter if you look at Zero’s Twitter feed a lot of people are using the word love which he says is quite strange for counting company. One thing I want to highlight from this post is John highlights how the accounting industry operates and how it zero fits within this industry. Autolyse history of accounting software in zeros place within it. I found this description extremely helpful. This is the one part I want to share with you. Small business accounting software tends to be localized by country such as Quick Books and you say. MYOB in Australia and bits of sage notably in the UK. The reason for country specific software was that this stuff arose during the 1980s which was a big period of tax reform. Globally there localization was important for compliance. Moreover that was a different world. There was no reason to expect back say into it which is all referred to as quick books and the US would have the local knowledge is seen in Australia let alone France. He poses the question Could you imagine programming French tax law into accounting package written in California.
Now could you imagine doing it pre internet. Small businesses of software is much more important business outside theU.S. than is inside.
