After suffering a 23% stock drop, Xero says it is complying with NZX disclosure rules, citing a history of "high volatility" among shares.

The plunge, over a six day period, was explained after the company received a notice from NZX regulators questioning the drop in share price.

"The Xero share price has a history of high volatility as a result of a tightly-held share register, thus buying or selling pressure from one or more institutions can significantly affect the price," explained Xero CFO Ross Jenkins.

"The company remains confident in its growth strategy and can report its country offices are performing well through the first quarter, with Australia, in particular continuing its strong growth trajectory."

Amid an "aggressive recruiting" campaign, the company has since seen shares rise from as low as $1.24 to $15.74 at the close of play on Wednesday.