Nuix (ASX:NXL) faces yet another indignity

Shareholders for the analytics software company might want to look away, as the stock deals with yet another bump in the road.

| More on:
Two children sit amid a tangle of wires at a desk looking sad and despondent.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Nuix Ltd (ASX: NXL) and its shareholders have had a rough year.

The company that entered the ASX in December with much hype and fanfare has seen the stock price fall from a high of $11.86 to now $2.67.

Much of the descent has been self-inflicted, with a combination of financial downgrades and external governance investigations killing investor confidence.

Last week, the long-awaited yearly results failed to impress the market. The same afternoon saw $340 million worth of shares released from escrow, allowing now-departed executives and Macquarie Group Ltd (ASX: MQG) to sell off their holdings.

Unfortunately, the news doesn't get better for anyone concerned with the analytics software business.

Bouncers throw Nuix out of the ASX 200

After market close on Friday, the news came that Nuix would be removed from the S&P/ASX 200 Index (ASX: XJO).

The indignity will come before the ASX opens on Monday 20 September.

The move is significant because passive funds that follow the ASX 200 will be forced to sell off Nuix shares, pushing up supply of the stock.

Boosted supply could lead to a price plunge. Already in early Monday morning trade, Nuix shares have lost 1.5% off their value and are trading at $2.63 at the time of writing.

The stock price will be further in focus until 20 September hits.

Nuix did not comment on its exclusion from the index.

Cooperating with authorities

Last week, the company revealed that the Australian Securities and Investments Commission (ASIC) has been in touch.

"Nuix can confirm that it has today received notices from ASIC seeking documents," the board stated to the ASX.

"Nuix will, of course, cooperate fully with ASIC's investigation."

The corporate watchdog is reportedly investigating the integrity of financial information presented in its initial public offer prospectus.

ASIC will be reviewing the numbers Nuix presented for the 2018, 2019 and 2020 financial years.

Motley Fool contributor Tony Yoo owns shares of Macquarie Group Limited. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

A woman with strawberry blonde hair has a huge smile on her face and fist pumps the air having seen good news on her phone.
Broker Notes

Bell Potter names the best ASX 200 stocks to buy in November

These quality stocks are top picks in November according to the broker.

Read more »

A female stockbroker reviews share price performance in her office with the city shown in the background through her windows
Share Market News

5 things to watch on the ASX 200 on Friday

Another good session is expected for Aussie investors today. Here's what is happening.

Read more »

A middle-aged man working from home looks at his mobile phone with a laptop open on the table in front of him.
Share Market News

Here's why more Australians intend to work during retirement

A new survey reveals insights into the retirement intentions of older Australian workers.

Read more »

Businessman using a digital tablet with a graphical chart, symbolising the stock market.
Share Market News

Are we soon to see a skyrocketing Aussie stock market?

Will the Aussie stock market follow the lead of American stock markets following the US election?

Read more »

A man and a woman sit in front of a laptop looking fascinated and captivated.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a volatile, but positive, day for ASX shares this Thursday.

Read more »

A cloud with a blue arrow pointing upwards through its middle symbolising a rising asx share price
Record Highs

Xero and 2 other ASX tech shares cracking all-time highs on Thursday

The price peaks follow a significant lift in the NASDAQ overnight following Republican Donald Trump's US election victory.

Read more »

A US flag behind a graph, indicating investment in US shares
Share Market News

What the US election outcome means for ASX shares

ASX shares are having a mixed reaction to the US election results today.

Read more »

Excited group of friends sitting on sofa watching sports on TV and celebrating.
Share Gainers

Why Block, GQG, Neuren, and Sigma shares are racing higher today

These shares are rising on Thursday. But why?

Read more »