Who sold $154 million worth of Xero shares this week?

Questioning asx share price represented by investor with question mark bag over face

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There has been reporting this week that a major investor decided to sell a significant chunk of Xero Limited (ASX: XRO) shares.

We’re not talking about $1 million or $2 million.

According to the Australian Financial Review, the broker UBS handled a major $154 million sale of shares. The newspaper said 2.34 million Xero shares were sold at $66 per share, representing a 0.5% discount to the last closing price.

The Xero share price is currently at $68.91, so it has risen 4.4% since then – the investor has left some money on the table.

It hasn’t been announced who the seller was, though AFR sources suggested it would be surprising if it were Xero founder Rod Drury or Craig Winkler’s Givia.

Due to the fact there hasn’t been an announcement from Xero, investors can’t know for sure who it was.

But, it seems puzzling selling now, considering the Xero share price has dropped by more than 50% this year, yet the business continues to grow.

Growth continues

It was only a couple of weeks ago that Xero announced its FY23 half-year result.

The ASX tech share announced that its total number of subscribers had gone up by 16% to 3.5 million, helping operating revenue increase by 30% to NZ$658.5 million. Annualised monthly recurring revenue (AMRR) grew 31% to NZ$1.5 billion after a 13% increase in average revenue per user to NZ$35.30.

Xero’s free cash flow surged 145% to NZ$15.6 million as it continues to invest heavily in sales and marketing, as well as research and development.

Xero CEO Steve Vamos said:

Our strong revenue growth momentum supports our strategy to invest, with discipline, to take advantage of the significant opportunity ahead as we continue to drive efficiencies in our business. This strong result underlines the quality of our business and the value we’re generating as more customers join us, do more with our open platform and stay with us for longer.

We’re focused on delivering the world’s most insightful and trusted small business platform by driving cloud accounting adoption, growing the small business platform and building for global scale and innovation. We remain committed to investing for the short and long term opportunity and supporting customer needs while maintaining a disciplined cost focus.

Xero share price snapshot

Over the last month, Xero shares have declined by around 9%. They are also down 51% over the past 12 months.

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