One, or possibly two investors have offloaded a huge number of Xero shares as the Wellington company's ASX-listed stock surged to a record high.
Yesterday, late in the session, Credit Suisse sold 3 million Xero shares at A$75.00 each (a 1 per cent discount on the trading price) or a total A$225m. It was the day's biggest single sale on the Australian Stock Exchange.
Xero tells the Herald the identity of Monday's block seller was Craig Winkler, the MYOB founder turned Xero director. A spokeswoman said it was part of Winkler's 10-year plan, which began in 2017, to offload all of his business assets to fund his philanthropy.
Monday's chunky trade followed another substantial block trade on Friday that saw UBS sell 1.33m shares for A$75m in a A$100m transaction. The identity of that seller has not been disclosed.
A Companies Office update dated October 31 shows only two individual shareholders with more than 4 million shares: founder and director Rod Drury and his estranged wife Anna with 15.7m and director Craig Winkler's Givia charitable trust with 11.3m (the top five also features nominee holdings for brokers and wealth managers HSBC with 30.3m shares, JP Morgan with 23.3m and Citicorp with 12.2m).
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Drury and Winkler have both trimmed their stakes over the past couple of years.
Drury told the Herald he did not sell any shares on Friday.
Xero's 201 Annual Report puts the Drury family's stake at 17.7m shares and Winkler's Givia at 12.0m as of April 18 this year.
In May, the Drury family sold a 2 million block of shares, realising at least A$116m ($120m).
Through a rep, Drury said the sale was for personal reasons.
That followed a November 2017 sale of three million Xero shares that raised the Drury family $94.5m.
According to the October 31 Companies Office update, the Drury family holds an 11.12 per cent stake in Xero worth $1.23b.
Doubled in value since ASX listing
Xero's stock has been on a bull run since it went ASX-only in January last year, with its shares more than doubling in value.
Last week, it set a series of record highs after the company squeaked into the black for the first-half and passed the 2 million subscriber milestone as annualised recurring revenue rose 30 per cent to $764.1m.
The stock closed Monday at A$75.71 for a market cap of A$10.7b ($11.0b) - meaning that if Xero had remained on the NZX it would be today rubbing shoulders with our largest listed companies by market value - Merdian ($11.8b), Auckland International Airport ($11.3b) and A2 ($9.25b).
Xero shares continued their bull run in early Tuesday trading, rising 1.86 per cent to a fresh high of A$77.12.
Strong financial results have under-pinned Xero's gains over the past 18 months. But Drury also said the move to ASX-only was necessary to draw more offshore institutional investors. He also cautioned against NZ technology companies making such a move too early, however, saying it was better to be a big fish in a small pond (the NZX) than a small fish that could get lost in a big pond.