Xero chief executive Rod Drury. Photo / Dean Purcell
Xero chief executive Rod Drury. Photo / Dean Purcell
Shares in Xero have jumped 24 per cent in the past week, amid speculation a large seller has left the market.
The stock climbed as much as $4 to an intraday high of $20.40 yesterday, the highest since October, before eventually closing up 35c at $20.05, compared with last Monday'sclosing price of $16.40.
Shares in the cloud-based accounting software firm came under selling pressure last year, falling from a high of $45.99 in March to as low as $15 last October as investors considered the outlook for growth, particularly in the US, while the escrow period ended for its 2013 capital raising, which saw it book $180 million from investors.
Last week's sudden climb in the share price saw the stock market operator and regulator issue a "please explain" notice asking Xero to confirm it was disclosing all material information that might be behind the gain. Xero confirmed it was, without giving any further explanation.
Market sources said 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 marketplace and he is pretty much gone," said Grant Williamson at Hamilton Hindin Greene. "The buyers are definitely back in control of the stock at the moment."
The appetite for Xero had flowed through to other tech companies, Williamson said. Diligent Board Member Services, the governance app developer, has gained 11 per cent in the past month, and closed yesterday at $6.17.
Outside the benchmark index, Finzsoft Solutions, the software developer under a takeover attempt by its managing director and major shareholder, has gained 19 per cent in the past month, and recently traded at $3.80.
