recent transactions

Been watching XRO for a while (ie pre Winklers 1 share ASX float)

I love the business model, am using and am a fan of their product even if their support is fairly patchy at times (almost expected with an internet SAAS model that is rapidly expanding) but have been pondering about its valuation.

Announcements over the past week show the following transactions:

Winkler sold 2.5m for NZ$15m
Drury sold 0.83m for NZ$5m
Edwards/Edwards & Finch 0.33m for NZ$2m

Plus a further 10m shares issued @$6

All were off market sales @ $6.00 to:
1) Valar Ventures (Peter Thiel ... ex paypal if I remember correctly) - 4m shares &
2) Matrix Capital Management - 9.667m shares

Interesting that the reason given for the mix of sales of existing shares + issue of new shares was "The investors made the offer to buy shares from the three largest Xero shareholders in order to minimise dilution to existing shareholders".

Effectively attempting to camoflage the fact that at $6.00 the directors are sellers ie they think that at that price at the moment the company is over valued.

No doubt has to do with the other comment:
"Xero reported NZ$30.6 million of cash on hand and a first half loss to 30 September 2012 of NZ$7.0 million. Xero anticipated an increased loss for the second half to 31
March 2013".

$30m as at 30/9 + another $60m from the raising then burning say $10m a half year. $50m .... undoubtedly at least part working capital for organic growth & marketing but I wonder if some will be a war chest for acquistions?

Hmmm ... will continue to watch.