The one ASX company Bronte Capital thinks could be a $100b global tech giant

Bronte Capital’s John Hempton, one of the country’s most vocal and aggressive short sellers, owns just one ASX-listed company in his fund: Xero. And he says the accounting software group, which has a $5.4 billion market capitalisation, has a shot at being a $100 billion company.

“If any Australian company has the potential to be a $100 billion tech giant, it’s Xero,” Mr Hempton told The Australian Financial Review. “In order to pull that stunt, they need to succeed in what the global ambition of Xero should be – we are the backbone accounting system all round the world and everyone plugs into us.”

Xero, bought at much lower levels, is now one of Bronte’s largest positions, driven by its share price rise, which is up around 60 per cent this calendar year.

Mr Hempton’s ambitions for the group, which earlier this year made the ASX its sole listing after controversially leaving the New Zealand Exchange, are enormous. He said the company was far ahead of many of its competitors by putting accounting software in the cloud but hasn’t perhaps been as ambitious as it might have been.

But now Xero is at an inflection point of sorts. In March, founder Rod Drury announced he would step back as chief executive, though would remain as a non-executive director and shareholder. Former Microsoft Australia chief executive Steve Vamos was appointed to the job.

It was a move that surprised the market, with questions being asked about what had triggered Mr Drury’s decision. Any number of theories are still being tossed about. The prevailing one is a combination of some investors pushing for a more ambitious global outlook, coupled with Mr Drury reorganising his own priorities.

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Source: The one ASX company Bronte Capital thinks could be a $100b global tech giant | afr.com