The Trade Me founder is backing his own horse. Today Xero director Sam Morgan disclosed the purchase of 1.1 million shares in the company on April 6, bringing his total holding to 2.91 million or around 5% of the company.
Mr Morgan paid $1 million or 90 cents a share for his parcel of 1,111,111. Xero's shares closed at $1.15 on the day of his purchase.
A second insider also backed up the truck, with Graham Shaw buying $450,000 worth of shares.
Xero’s shares (NZX: XRO) have been on a tear recently, rising from beneath 70 cents at the start of the year to $1.30 yesterday. Today, buoyed by news of the insider buy, they climbed again, to $1.38. After a long time in the doldrums, the stock is now above its IPO price.
The rise, which defies the potentially diluting impact of a recent $23 million issue, has come on the back of a slew of good news for the online accounting software company, whose SaaS (software-as-a-service) model is gaining currency throughout the computer industry.
Xero also recently inked deals with all the major Australian banks to supply feeds to its software, and was named as one of the founding partners in Telstra’s T-Suite SaaS service - a development that chief executive Rod Drury says will provide his company with instant credibility in the Australian market, plus instant access to 700,000 small business customers.
Mr Drury is also hoping for expansion further afield through the recent appointment of Dell global vice president of enterprise sales Andy Lark to its board. Mr Lark, who is responsible for the world’s largest e-commerce site, Dell.com, has potential to help push Xero into the North American market.
Yet all the stars in the Xero universe are perfectly aligned. Mr Drury is not expecting profitability until his company lands its 15,000 customers (it's currently around 6000), and the company is still only half way to achieving the average revenue per user (ARPU) of $70 promised in its prospectus.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Why has the construction industry got it good? Metro Performance Glass's CEO Nigel Rigby explains
- NBR's veteran budget reporter Rob Hosking breaks down the key points
- AUT professor John Tookey says the government is far behind the curve when it comes to housing and Auckland transport
- BNZ's Craig Ebert on the Budget 2016 forecasts
- Grant Thornton's Greg Thompson on the Budget tax measures and the focus on debt repayment