9 Sep 2015

FMA investigates Xero share price boost

3:01 pm on 9 September 2015

The Financial Markets Authority (FMA) is investigating a sharp rise in Xero's share price in mid-Februray.

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Xero managing director Rod Drury said at the time that he was convinced the company had met its disclosure obligations. Photo: RNZ

The share price jumped just a week before the accounting software company announced it had raised nearly $150 million of fresh capital from a Silicon Valley-based venture capital firm.

Xero's stock rose 16 percent over two days to $19 a share on 19 February, from $16.40 on 17 February.

The stock exchange had queried Xero about the price rise at that time, and the company's founder and managing director Rod Drury said he was convinced there had been no leak and the company had met the market's continuous disclosure rules.

Investors had been waiting for the software company to raise more funds ahead of its planned expansion in the US.

Xero's shares jumped more than 27 percent to $23.30 in morning trading after the capital raising announcement on 25 February.

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