Nuix (ASX:NXL)'s own shareholders are suing it

The troubled software company is copping the wrath of its own investors, who have lost a lot of money.

| More on:
a diverse groups of about twenty people stand together in a crowd staring to the front with angry and annoyed looks on their faces.

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

Devastated shareholders of Nuix Ltd (ASX: NXL) have had enough, launching a class action against the software company this week.

Legal firm Shine Lawyers announced Monday that their case has been filed in the Supreme Court of Victoria, alleging Nuix gave "inadequate guidance" on revenue and "misleading" sales forecasts.

The shareholders are also accusing the company they own of breaching its continuous disclosure obligations as a publicly listed entity.

Nuix shares listed on the ASX last December with much hype after an initial public offer price of $5.31. Investor fervour hit its peak in January, with the stock price reaching $11.86.

But since then a series of governance scandals and financial downgrades have seen the stock plummet to a low of $2.16. 

Nuix shares closed Monday at $2.75, which was 1.43% down for the day. 

Nuix accused of costing investors "hundreds of millions of dollars"

Shine Lawyers class actions practice leader Craig Allsopp said its investigations uncovered the prospectus could have "misrepresented or omitted financial information and potential risks, which was misleading and deceptive to investors".

"This inflated forecast has ultimately cost shareholders hundreds of millions of dollars," he said.

"Our class action aims to recover these losses for the thousands of investors impacted by Nuix Limited's alleged misconduct."

The analytics software company on Monday acknowledged to the ASX that the class action had been filed against it.

"The claim does not identify the amount of any damages sought," the statement read.

"Nuix disputes the allegations and will be defending the claim."

Allsopp encouraged any investors who bought Nuix shares between 18 November 2020 and 30 May 2021 to register for the lawsuit.

Nuix last month appointed a new chief executive and chief financial officer, calling it an "important moment" in its history. 

Whether that provides a clean slate for investors remains to be seen.

Shaw and Partners senior investment adviser Adam Dawes said last week that he would wait until seeing the annual general meeting on 30 November before deciding whether the stock was a bargain buy.

"The shareholders are going to get those rotten tomatoes and get ready to throw them because there's going to be some hard questions to be answered," he told Switzer TV Investing.

"Even if it gets to $3 to $5 and I miss out on that initial rally, I'm comfortable then to get in because I know that some of these problems have been worked through."

Should you invest $1,000 in Commonwealth Bank Of Australia right now?

Before you buy Commonwealth Bank Of Australia shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Commonwealth Bank Of Australia wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. 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

Person pressing the sell button on a smartphone.
Broker Notes

Sell alert! 3 ASX shares the brokers are calling time on

Brokers say it's time to hit the sell button on these ASX shares.

Read more »

A couple smile as they look at a pregnancy test.
Share Market News

After the recent debacle, what price target does Macquarie have on Monash IVF shares?

Supported by strong industry tailwinds, this ASX stock could be worth a second look.

Read more »

Fancy font saying top ten surrounded by gold leaf set against a dark background of glittering stars.
Share Gainers

Here are the top 10 ASX 200 shares today

It was the ASX's fourth day of gains for the week today.

Read more »

A happy couple drinking red wine in a vineyard.
Best Shares

5 ASX 200 shares just upgraded to strong buy ratings

The experts say these 5 shares are set to rise over the next 12 months.

Read more »

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

What is next for ASX 200 shares after last month's upheaval?

Macquarie reveals its outlook for ASX 200 shares in May in a new research note published today.

Read more »

a man raises his fists to the air in joyous celebration while learning some exciting good news via his computer screen in an office setting.
Share Gainers

Why Cedar Woods, Healius, NextDC, and Platinum shares are charging higher today

These shares are rising on Thursday. But why are investors buying them? Let's find out.

Read more »

A young man clasps his hand to his head with his eyes closed and a pained expression on his face as he clasps a laptop computer in front of him, seemingly learning of bad news or a poor investment.
Share Fallers

Why Brainchip, DroneShield, Resolute Mining, and Woodside shares are falling today

These shares are under pressure on Thursday. What's going on?

Read more »

Two CEOs shaking hands on a deal.
Financial Shares

This ASX 300 stock is jumping on surprise merger news

This stock could be having a very big makeover.

Read more »