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.
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.”
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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.
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