Originally Posted by
Snoopy
For a share that trades at up to ten times its book value, I am not sure you should be worried about it. No value investor is in looking to spend $17 to buy just $2 worth of assets. This is not a value investment. Like all SaaS ventures this is a development story driven by the fact that once the base software is in place operating costs drop to near zero. Thus it doesn't take a great genius to work out that with an ongoing revenue stream in the future, profitability should be strong. Whether 'building the base' to spring from can be achieved before the company runs out of cash is the question. In the case of Wynyard, the answer was no. In the case of Xero the answer is 'maybe'.
This summer have some respect for the girl at the end of the driveway selling homemade lemonade. It is likely that she will be contributing as much to GDP for the New Zealand economy as the whole of Xero is.
SNOOPY