Xero responds to NZX price spike query

Holly Ryan for the New Zealand Herald writes:   Online accounting firm Xero has been issued with a price enquiry from the NZX this afternoon after its shares jumped from $16.40 to $19.00 in two days , -- an increase of 15.85 per cent.

Xero chief executive Rod Drury confirmed the company was in compliance with NZX rules and attributed the increase to possible investors from its UK and Australian markets as well as increased media coverage.

"Since Xerocon we've had a really good profile in the UK community and a lot of the investment community were watching what was going on," Drury said. "It was a massive conference and the tone of it was incredibly positive. We do have lots of overseas investors, and we get called everyday from analysts wanting to cover our stock because our growth rates are so high and we're really building quite a nice brand as a pretty sophisticated company globally," he said.

Xero shares reached a high of just under $45 last year before falling by 47 per cent over the rest of the year. Drury said public perception around US issues had held the company back.

"I think a lot of [software as a service] stocks got pulled back a few months ago and a lot have bounced back," Drury said. "I think we were being held back because of perceived US execution issues but people have seen us building on great people and the response from the UK shows that we're doing really well so hopefully that's all just coming back a bit."

In its formal response to the NZX, Xero said it continued to comply with its continuous disclosure obligations under the NZX Listing rules.