Will King

@TheKouk Did the Labor party come up with this argument and tell you to write it up, or did you come up with this ridiculous nonsense all by yourself. If the former, you need have a real go at them for selling you a complete dog with flees that makes you look really stupid!

This message exchange is with my ex-wife who is a Partner at a New York law firm working in international financial markets @GeoffWilsonWAM @cjoye 🤯

$XRO.AX Why Xero’s Adj-EBITDA is sketchy🚨🔎 1/ The standard defence for adding back share-based compensation (SBC) to reach Adjusted EBITDA is always the same: “It’s non-cash.” That defence was always weak; it became indefensible for Xero. 2/ The board authorised a buyback of up to A$550 million, explicitly to offset dilution from SBC grants. The Annual Report makes this clear: the buyback is to neutralise dilution associated with upcoming FY27 SBC allocations and historical grants. Management’s own words confirm what we always suspected: SBC is a cash cost. 3/ $XRO.AX are about to spend real money, drawn from the same balance sheet that just absorbed a NZ$5.4 billion acquisition, purely to undo the dilution SBC creates. This isn’t accounting theory. This is cash leaving the company. 4/ Walk through the arithmetic: FY26 SBC expense = NZ$317 million • Buyback authorised = A$550 million (~NZ$660 million) - BC add-back in Adj-EBITDA: NZ$240m (income statement) - SBC capitalised: NZ$77m (balance sheet, amortised back later) - Total SBC cost to shareholders: NZ$317m (the real dilution figure) Xero is planning to spend roughly two full years of SBC expense to neutralise the dilution. That cash has to come from somewhere. 5/ Specifically, it comes from the NZ$554 million of free cash flow that investors have been trained to view as the “cleanest” measure of Xero’s earnings power. The practical effect? That FCF is not freely available capital. 6/ A material portion of it, potentially NZ$330 million per year if the buyback is spread over two years, is pre-committed to buying back shares. True distributable free cash flow after the SBC buyback obligation is probably closer to NZ$220–250 million. That is the number actually available for debt repayment, acquisitions, or genuine return of capital. 7/ Now layer on the R&D capitalisation: • Income statement charges NZ$267 million of amortisation on previously capitalised development costs • Xero defers NZ$430 million of new development spend onto the balance sheet Adj-EBITDA therefore gets the double benefit of: Not expensing the NZ$430m new spend, and adding back the NZ$317m SBC 8/ Result? Adj-EBITDA = NZ$757 million This is the most flattering earnings number Xero could legitimately present, and the one most prominently featured in every analyst model and market commentary. The most honest earnings number, FCF after the SBC neutralisation cost, is probably NZ$220–250 million. 9/ The gap between NZ$757m and ~NZ$225m is not fraud. Every adjustment is disclosed. The accounting is technically correct. But the gap is roughly NZ$500–535 million. That is the distance between the number the company wants you to use and the number that most accurately reflects what shareholders actually receive. 10/ This is the SBC Buyback Loop in its purest form. Companies issue shares → dilute shareholders → report “non-cash” expense → add it back to EBITDA → market capitalise the inflated number → the company then spends real cash to buy back the very shares it just issued. It’s a closed loop that transfers value from existing shareholders to employees while flattering every key valuation metric. For $XRO.AX, the loop just became explicit and undeniable. What was once a theoretical critique of Adjusted EBITDA is now written in the company’s own capital allocation policy. Investors should price it accordingly.

@martinfrogers Where does it mention this contract is with Tencent?

The annual report for $XRO.AX is brain-damaging to read because there is an amortisation charge of $383m and share-based payments expense of $240m on GAAP profit of $167m. Hurts my head.

@YellowLabLife @jtourzan

@jtourzan Don’t make the koala post it…

What do I panic buy? $mari.to $cs.to $hbm $teck $ffx.to so far

Budget 2026 is a direct tax on aspiration and risk-taking. It kills the incentive for young Australians to invest in shares, startups and productive businesses. This is intergenerational betrayal dressed up as fairness. Stop punishing success. @AlboMP @JEChalmers”

budget.gov.au/content/bp1/do… CGT discount removed on ALL assets, AND minimum CGT rate of 30%, even if you earned exactly $0 in normal income during that year. Perhaps the most disgusting, anti-productive, uncompetitive change to Australian fiscal policy in modern history

If you have some free time this weekend @Tbone_Al open.spotify.com/episode/6oKi99…

@jgrogan222 @Tbone_Al

Jim Chalmers blames Harold Holt for the latest interest rate rise.

@WheatWatcher What size are you @Tbone_Al

A question. What loser buys this t shirt?

When the govt fucks every taxpayer in the upcoming budget, here is where your money has been going 👇@GeoffWilsonWAM @TwinTurboCe1ica @bowtiedstocks

@Tbone_Al Don't forget this little one for the Great Public Servants of NSW afr.com/politics/infla…

Someone smarter than me, please add up a) Snowy Hydro 2.0 b) Inland Rail c) Cancelled Commonwealth Games d) NDIS fraud e) Aboriginal social welfare f) Suburban Rail loop g) Cross River Rail h) Wasted covid vaccines i) PNG NRL team j) Brisbane Olympics k) Green Hydrogen projects

$GME

@Tbone_Al @puppyeh1 @DattCapital Absolutely. Both @TwinTurboCe1ica and @TRAVmoneyofmine were posting stock images of third-world roads as “illustrations” of HR falling apart. Then @John_Hempton suggested flying a drone to inspect it. CE built a mine in 22 months and exceeded HR capacity.

@Daily_MailUS @Tbone_Al

A JPMorgan executive allegedly used her power to sexually harass and abuse a junior male employee - drugging him, subjecting him to racial abuse and threatening his career. 🔗 trib.al/RglAnTU

@Tbone_Al @grok can you please explain to TBone AI how to turn on Find my iPad

A very valuable lesson learnt the hard way @Will_UKing. #ipad #m5ipad

@EBIT_duhhh Welcome back Big T

$smr.ax great buying at 2.27 I think.

@Scutty 🐐

👑 #IYKYK #Stanley