Xero, the cloud-based accounting company, says it is complying with NZX continuous disclosure rules and a 23 percent slump in its shares in the past six days may reflect volatility as a result of a tightly held register.
Xero is the second NZX-listed tech company in as many days to get a ‘please explain’ notice from NZX regulators following a sudden drop in its share price. Diligent Board Member Services said yesterday it wasn’t sitting on any market moving information that might explain a four-day, 17.3 percent decline.
Xero shares last traded at $15.80, up 0.4 percent. They have declined from a record high $18.90 on July 8, having soared 176 percent in the past 12 months. The company is yet to post a profit as it burns cash to boost sales.
“The company remains confident in its growth strategy and can report its country offices are performing well through the first quarter, with Australia in particular continuing its strong growth trajectory” Xero said in a statement from chief financial officer Ross Jenkins.
Xero’s share price “has a history of high volatility as a result of a tightly held share register, thus buying or selling pressure from one or more institutions can significantly affect the price,” he said.
Chief executive Rod Drury is the biggest shareholder, with about 18.5 percent of the company and Craig Winkler holds 15.7 percent. Matrix Capital holds 9.6 percent and Sam Morgan’s Jasmine Investment Holdings owns 5.2 percent.