Monday, October 13, 2014

Xero's stock keeps tumbling / stock closed down 6.3 per cent at $17.95

Jamie Gray for the New Zealand Herald writes: Xero's stock keeps tumbling

.......Xero shares took another tumble yesterday, extending losses from Friday after analysts questioned the company's North American growth.
The online accounting software developer's stock closed down 6.3 per cent at $17.95 last night, below the $18.15 issue price of the company's $180 million capital raising it conducted a year ago with high-profile US investors including Peter Thiel-backed Valar Ventures.
Trading restrictions on the new shares issued in the capital raising end on Thursday and there has been market speculation that newly freed-up stock could be sold, which would drive the share price down further.
Xero shares, which hit a record high of $45.99 in March, valuing the company at almost $6 billion, fell through the key $20 support level on Friday after analysts expressed disappointment about the company's Thursday operating update, which showed only 4000 new US customers had been added, to reach a total of 22,000, in the six months to September 30.
Goldman Sachs downgraded its recommendation to a sell, while other analysts lowered their 12-month price targets on the stock.
A global dip in investor sentiment has also weighed on Xero shares.