9 Apr 2014

Xero well placed to weather meltdown

7:01 am on 9 April 2014

In the wake of the meltdown in tech stocks in the United States, Xero shares fell as much as 17 percent on Tuesday before recovering slightly.

The shares peaked at $45.99 on March the 6th and closed at $31.50 yesterday.

But Xero founder and managing director Rod Drury said this was not a problem for his company because it already had plenty of cash to fund its growth.

Xero raised $180 million at $18.15 per share last October, and figures released last week showed it had $210 million after losing about $35 million in the 12 months ended March.

Mr Drury said the market meltdown would make it more difficult for would-be Xero competitors to raise money.

"Nobody likes to see share price falling but you don't get too emotional about it - try not to get too excited when it goes up, try not to get too excited when it goes down," he said.

"The key thing is there's a difference between companies that have raised their money and those that haven't."

One of the reasons the company raised so much money last year was in case there anything happened inside the market, and it felt it was in a strong position, Mr Drury said.

"We have over $210 million in cash, and our team just keeps executing."