‘Plenty of cash’ cushions Xero’s fall from heights

LOWER CLOUD

XERO’S sharemarket tumble has knocked $55 million off the value of founder and chief executive Rod Drury’s 18.5 per cent stake in the cloud-computing firm, which had risen to $325m earlier in the week.

Duke said while watching the share price rise was fun, the fall was beyond Xero’s control and would not affect its strategy.

Xero shares fell 23 per cent from a record high of $15 earlier in the week to an intra-day low of $11.51, before recouping some ground in afternoon trading and closing 6 per cent lower at $12.50.

‘‘We are executing our plan to become a significant global company and we have got plenty of cash, so it doesn’t really matter,’’ Drury said. Xero had certainly not hyped the business.

‘‘We are not that ‘noisy’ in the market. People seem to think we control the share price. We don’t.’’

Forsyth Barr analyst Andrew Harvey-Green said he was unaware of any new information or event that triggered the drop. ‘‘For any company to have a 10 per cent fall or thereabouts is a lot more than we would normally expect.’’

Xero’s retreat – like its earlier Xero shares fell 23 per cent from their record high of $15 seen earlier in the week to an intra-day low of $11.51 yesterday, before closing at $12.50. strong bull run – was on relatively small volumes. No more than a few hundred thousand of Xero’s 117 million shares have traded on any one day during the past few weeks. A somewhat higher-thanusual 431,000 shares changed hands yesterday at an average price of $12.25.

Harvey-Green was loath to call the $15 high a bubble, suggesting instead that investors were profittaking.