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Diligent shrugs shoulders over share price spike, hefty trading volume

Monday 11th March 2013

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Diligent Board Member Services, which reported an almost trebling of annual profit earlier this month, can't explain a surge in its share price and hefty trading volumes in recent days.

The company said it wasn't aware of any material information that hadn't been released to the market that caused as much as a 26 percent jump in its share price in the past week. Nor could it account for its average daily value of trading rising more than tenfold to $8.4 million since March 7.

The stock exchange issued a 'please explain' note today due to the price spike and increase in trading volume.

Last week, James Schofield at First NZ Capital, who analyses Diligent, said the company's "storming run" reflected investors realising Diligent had "reached critical mass" and would start "throwing off a lot of cash."

The shares rose 6.1 percent to $6.36 in trading today, valuing the firm at $555.4 million. That's up 22 percent since Diligent reported its annual earnings on March 1.

Diligent's tear mirrors that of online accounting software firm Xero, which has jumped 22 percent since the start of the month, breaking through the $1 billion market cap barrier, before it has even turned a profit.

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