Xero says share price surge reflects upbeat press
Xero, whose shares soared 333 percent in 2013, has put down a rising share price to positive press, a growing brand in the US and high volatility from being closely held after getting a 'please explain' notice from the stock market regulator.
The share market supervisor questioned a 42 percent gain in the Xero share price from Dec. 5 to Jan. 16, since the last price sensitive announcement was made in late November. The shares fell 2 percent to $41.51 today, having reached a new intraday high of $43.30 earlier in the session.
Xero chief financial officer Ross Jenkins responded by saying the Wellington-based company continues to meet continuous disclosure rules, and that it was on track to meet its forecast sales growth of 80 percent in the 2014 financial year.
"We note that the Xero share price has a history of high volatility as a result of a relatively tightly held register," Jenkins said in a letter to NZX's market surveillance unit. "We also note that we have seen an increased awareness of Xero in the US (particularly following Xero's capital raise of NZ$180m in October 2013), and that Xero has been the subject of recent positive media attention in Australia, New Zealand and the US."
In July last year the company responded to a price inquiry by putting it down to its tightly held register creating volatility. As at May 10 last year, 54 of Xero's 4,715 shareholders held 83.7 percent of the company, according to its 2013 annual report.
Chief executive Rod Drury is the biggest shareholder with a 17 percent stake, followed by MYOB founder Craig Winkler with 15.7 percent, according to recent substantial shareholder notices.
The company yesterday appointed Chorus sales and market general manager Victoria Crone as its New Zealand managing director, effective from April.