Tale of two tech firms : Xero - the market darling whose previously rocketing valuation captivated the investment community - plunged to a 10-month low.

Christopher Adams for the New Zealand Herald writes: It was a tale of two technology companies yesterday as Eroad stock soared following the firm's NZX debut, while shares in accounting software provider Xero - the market darling whose previously rocketing valuation captivated the investment community - plunged to a 10-month low.

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......Meanwhile, as Eroad's shares climbed yesterday, Xero stock was going in the opposite direction and closed down $1.33 at $20.17, 55 per cent below the $44.98 record high it hit in March.

Last night's closing price gave Xero a market capitalisation of $2.6 billion, down from $5.7 billion in March.

The cloud-based accounting software developer has been caught up in a global sell-off of growth-focused equities this year as investors lost their previously ravenous appetite for unprofitable companies with lofty promises of future success.

Xero's latest decline - its shares have dropped roughly 15 per cent this week - has left market watchers scratching their heads.

Ward, however, has one possible theory that relates to the company's $180 million capital raising last October. New shares issued in the capital raising are restricted from being sold until October this year.

Ward said there could be a fear among Xero shareholders that investors involved in the capital raising - including early Facebook investor Peter Thiel - might sell stock when the restriction is lifted, which could push Xero's share price even lower.

Forsyth Barr analyst Blair Galpin had not seen anything to explain why the share price was cooling off.

"It's not a large number of shares trading for that price drop," he said. "Nothing's changed in the Xero story." Xero chief executive Rod Drury said he did not know why the shares fell as the business "is firing".

- additional reporting Hamish Fletcher