Story image

Xero shares climb 24% in one week as seller leaves the market

24 Feb 15

 Shares of Xero, the cloud-based accounting software firm, have jumped 24 percent over the past week, amid market speculation a large seller has left the market.

The stock climbed as much as $4 to an intraday high of $20.40, the highest since October from last Monday's closing price of $16.40. The stock recently traded at $20.00.

The Wellington-based firm's stock came under selling pressure last year, falling from a high of $45.99 in March to as low as $15 last October as investors mulled the outlook for growth, particularly in the US, while the escrow period for its 2013 capital raising, which saw it book $180 million from investors, came to an end.

Last week's sudden climb in the share price saw the stock market operator and regulator issue a 'please explain' notice to the company, asking Xero to confirm it was disclosing all material information which might be behind the gain. The tech firm confirmed it was, without issuing any further explanation to the gain in its shares.

Market sources told BusinessDesk they thought a large seller had exited the stock, removing any downwards pressure on its price.

"As far as I know it is mainly the selling has dried up, there was one large seller in the market place and he is pretty much gone," said Grant Williamson, director at Hamilton Hindin Greene. "The buyers are definitely back in control of the stock at the moment."

The appetite for Xero has flowed through to other tech-based companies, Williamson said. Diligent Board Member Services, the governance app developer, has gained 11 percent over the past month, and recently traded at $6.10, coming off from the highest level it had been since July 2013. Outside the benchmark index, Finzsoft Solutions, the software developer under a takeover attempt by its managing director and major shareholder, has gained 19 percent over the past month, and recently traded at $3.80.

"They're following on the back of Xero," Williamson said. "There has been renewed interest in all of those types of stocks and that's getting all the prices trading higher. Although the stocks that pay high dividends have done extremely well, investors are also looking to add a bit of growth to their portfolios as well."

How blockchain will impact NZ’s economy
Distributed ledgers and blockchain are anticipated to provide a positive uplift to New Zealand’s economy.
25% of malicious emails still make it through to recipients
Popular email security programmes may fail to detect as much as 25% of all emails with malicious or dangerous attachments, a study from Mimecast says.
Human value must be put back in marketing - report
“Digital is now so widely adopted that its novelty has worn off. In their attempt to declutter, people are being more selective about which products and services they incorporate into their daily lives."
Wine firm uses AR to tell its story right on the bottle
A Central Otago wine company is using augmented reality (AR) and a ‘digital first’ strategy to change the way it builds its brand and engages with customers.
DigiCert conquers Google's distrust of Symantec certs
“This could have been an extremely disruptive event to online commerce," comments DigiCert CEO John Merrill. 
Protecting organisations against internal fraud
Most companies tend to take a basic approach that focuses on numbers and compliance, without much room for grey areas or negotiation.
Telesmart to deliver Cloud Calling for Microsoft Teams
The integration will allow Telesmart’s Cloud Calling for Microsoft Teams to natively enable external voice connectivity from within Teams collaborative workflow environment.
Jade Software & Ambit take chatbots to next level of AI
“Conversation Agents present a huge opportunity to increase customer and employee engagement in a cost-effective manner."