Nuix share price rockets 43% following court win

The Federal Court has ruled in this tech company's favour and dismissed a $187 million claim…

| More on:
Man with rocket wings which have flames coming out of them.

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

The Nuix Ltd (ASX: NXL) share price is on fire on Tuesday afternoon after emerging from a trading halt.

The investigative analytics and intelligence software provider's shares were up as much as 43% to $1.29 at one stage.

The Nuix share price has since pulled back a touch but currently remains up 31% to $1.19.

Why is the Nuix share price rocketing?

As we covered here earlier today, Nuix put its shares into a trading halt this morning while it awaited a ruling in the Federal Court of Australia. This was in relation to a claim made by its former CEO, Edward Sheehy.

Mr Sheehy filed proceedings in the Federal Court in October 2020 claiming that he validly exercised options in January 2020 that would have entitled him to be issued with approximately 22.6 million shares.

And with the former CEO insisting that he would have sold these shares long before the Nuix share price had collapsed, he was claiming significant damages.

All in all, Sheehy was seeking an award of damages of up to $183 million plus interest, which was the equivalent of almost two-thirds of Nuix's market capitalisation prior to today.

As you might have guessed from the Nuix share price reaction, the Federal Court has ruled in the company's favour and dismissed Sheehy's claims.

In a brief statement this afternoon, Nuix commented:

[T]he Federal Court of Australia has delivered its judgment in relation to the proceedings brought by Mr Edward Sheehy against Nuix.

The Federal Court this morning dismissed Mr Sheehy's claims. There is no requirement for Nuix to amend its options register and Mr Sheehy is not entitled to any monetary compensation from the company.

And while Mr Sheehy will have a period of time to appeal the decision, it seems unlikely that this will be overturned if appealed. Particularly given that a previous claim for the same matter was dismissed in the supreme court in 2019.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Scott Phillips.

More on Technology Shares

A man sits in contemplation on his sofa looking at his phone as though he has just heard some serious or interesting news.
Technology Shares

Up 60% in two months, is it too late to buy Pro Medicus shares?

Pro Medicus has been delivering solid returns for years. Can the trend continue?

Read more »

Group of people in a gym high five each other surrounded by gym equipment.
Mergers & Acquisitions

This ASX tech stock is hitting a record high on acquisition news

The market is responding positively to this news. Let's dig deeper into it.

Read more »

A man in a suit face palms at the downturn happening with shares today.
Technology Shares

Guess which ASX 300 share is crashing 17% on shock news

Investors are rushing to the exits on Thursday. Let's find out why.

Read more »

Cheerful boyfriend showing mobile phone to girlfriend in dining room. They are spending leisure time together at home and planning their financial future.
Technology Shares

These were the best ASX 200 tech stocks to buy in May

Shareholders of these shares were smiling last month. But why?

Read more »

A woman smiles as she sits on the bus using her phone and listening to music through headphones.
Technology Shares

Here's why I think these ASX tech shares are buys in June

These stocks have loads of potential.

Read more »

A young man wearing a black and white striped t-shirt looks surprised.
Technology Shares

Why did the Life360 share price rocket 51% in May?

This ASX 200 stock smashed the market last month with an incredible gain.

Read more »

Man ponders a receipt as he looks at his laptop.
Technology Shares

Up 30% since April, are Xero shares still a buy?

Xero shares have surged 30% since April, but can this SaaS leader's share price keep rising?

Read more »

A man and a woman sitting in a technology-related work environment high five each other while the man wears headphones around his neck and the woman sits in front of a laptop.
Share Market News

Strong gains for Wisetech, TechnologyOne, and Catapult amid ASX 200 tech sector lead

ASX technology shares led the market with a 3.85% increase while the ASX 200 lifted 0.88% last week.

Read more »