18 Jul 2013

Xero sets out reasons for share price fall

7:55 am on 18 July 2013

Xero says there is nothing untoward in the recent drop in its share price.

Stock market operator NZX has asked the IT company to explain the 23% drop in its share price over the last over the last nine days.

In response, Xero chief financial officer Ross Jenkins said the company has not failed to disclose any material information.

He said financial institutions had been buying Xero shares heavily, which caused its share price to rise sharply over the last few months.

Mr Jenkins said he understands the price moved over the last six to seven weeks from around $14 to nearly $19 on the back of New Zealand and overseas institutions buying. When financial institutions have completed their orders there is a resulting lack of demand in the stock which leads to some selling and decline in price, he said.

Mr Jenkins said Xero is confident for the future and is doing particularly well in the Australian market.

He said the company's half year results are due out in October which will be the time for the market to again determine the future of Xero.

Xero's share price dropped 14 cents to $15.60 on Wednesday.