Sellers lighten their scrip load

SELLERS well and truly trounced buyers with a chunk of the disposals in companies yet to make money.

By InvestSMART · 8 Dec 2012

By InvestSMART ·
8 Dec 2012

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SELLERS well and truly trounced buyers with a chunk of the disposals in companies yet to make money.

The scorecard registered $39 million to $132 million in favour of sellers.

MYOB co-founder Craig Winkler and Rodney Drury cashed in some Xero scrip following its extraordinary run since recently joining local lists after starting life on the New Zealand stock exchange.

The fledgling accounting software group's 52-week low on the NZX was about $1.92, with a high of around $4.61. Listed on these shores in November, the scrip yesterday touched $6.20, which placed a valuation of $727 million on a company that lost $5.4 million on sales of $13.4 million in the September half year.

Loss-incurrer No. 2 was NEXTDC, set up to establish independent data centres with the aim of making money out of cloud computing.

Founder Bevan Slattery - self-styled as one of Australia's most successful information technology and internet entrepreneurs - disposed of nearly $28 million of stock. That cut his stake from 24 per cent to about 15 per cent in a group that lost nearly $11 million in the June year.

Slattery said he would apply for up to $22 million of stock in Asia Pacific Data Centre REIT - a still-to-list data centre property fund established by NEXTDC. The stock was fetching $2.04 before Slattery's sale was reported, and after sold down to $1.76, closing yesterday at $1.85.

Among buyers, Kerry Stokes' interests bought more Seven West Media and Gerald Harvey topped up his stake in his retailing chain.

Graham Goldsmith opened his account in SEEK following his appointment to the board last month while chairman Neil Chatfield bought 10,000 shares.

A clutch of Northern Star Resources directors flogged off stock big time; institutions were the buyers.

InvestMet - associated with Michael Fotios - cut its stake from 10 per cent to 5 per cent and the board-related sales were booked at $1.35 a share. On Friday, the shares closed at $1.23.

Computershare chairman Christopher Morris and sister Penelope Maclagan collected some small change - $11.7 million.

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Frequently Asked Questions about this Article…

Why were sellers said to be “trouncing” buyers in the recent disposals?

The article reports that sellers dominated recent disposals, particularly in companies that have not yet made money. A scorecard of those trades registered $39 million to $132 million in favour of sellers, showing more selling activity than buying in that period.

What share sales did Xero founders make and what should investors know about Xero’s valuation?

MYOB co‑founder Craig Winkler and Rodney Drury cashed in some Xero scrip after a strong run since listing locally. The piece notes Xero’s NZX 52‑week low was about $1.92 and a high around $4.61; after listing in Australia in November, the stock touched $6.20, implying a $727 million valuation even though Xero lost $5.4 million on sales of $13.4 million in the September half.

What happened with NEXTDC founder Bevan Slattery’s share sale and how did the stock react?

Bevan Slattery sold nearly $28 million of NEXTDC stock, cutting his stake from about 24% to roughly 15%. The article says NEXTDC lost nearly $11 million in the June year. The NEXTDC stock was trading at $2.04 before the sale, slid to $1.76 after the sale was reported, and closed the day at $1.85.

What is the Asia Pacific Data Centre REIT mentioned in the article and how is it linked to NEXTDC?

The Asia Pacific Data Centre REIT is described as a still‑to‑list data centre property fund established by NEXTDC. Bevan Slattery said he would apply for up to $22 million of stock in that REIT, according to the article.

Which notable investors increased their stakes and which companies did they buy into?

The article highlights that Kerry Stokes’ interests bought more Seven West Media, Gerald Harvey topped up his stake in his retailing chain, Graham Goldsmith opened a SEEK account after his board appointment, and chairman Neil Chatfield bought 10,000 SEEK shares. These were among the named buyers in the recent activity.

What director and institutional activity was reported for Northern Star Resources and InvestMet?

A clutch of Northern Star Resources directors sold a significant amount of stock, with institutions noted as the buyers. InvestMet, associated with Michael Fotios, cut its stake from 10% to 5% with the board‑related sales booked at $1.35 a share; the shares closed at $1.23 on Friday.

How much did Computershare’s chairman and a family member collect from recent share sales?

Computershare chairman Christopher Morris and his sister Penelope Maclagan collected about $11.7 million from their share disposals, as reported in the article.

What examples of share‑price movement after insider sales are mentioned that everyday investors should watch?

The article gives several examples: Xero’s scrip reached $6.20 on its run; NEXTDC fell from $2.04 to $1.76 after Bevan Slattery’s sale and closed at $1.85; shares related to InvestMet’s board sales were booked at $1.35 but closed at $1.23. These examples show how large insider or founder sales can coincide with noticeable short‑term price moves.