Nuix Ltd (ASX: NXL) shares are ending the week with a bang.
This morning, the ASX tech stock has returned from a trading halt and has rocketed higher.
At the time of writing, the investigative analytics and intelligence software provider’s shares are up 22% to $1.63.
Why is this ASX tech stock rocketing?
Investors have been fighting to get hold of Nuix shares on Friday after the company won its court battle with the Australian Securities and Investments Commission (ASIC).
The corporate regulator took legal action against Nuix, alleging that it was engaged in misleading or deceptive conduct by making announcements to the Australian share market or by failing to disclose particular information to the ASX in connection with its financial performance.
With respect to its FY 2021 first-half annual contract value (ACV), ASIC said:
(1) Nuix’s ACV was $161.9 million; (2) Nuix’s ACV was $17.1 million, or approximately 9.6 per cent, less than the ACV Nuix expected in order to achieve the Prospectus ACV Forecast; and (3) the primary reason Nuix missed its forecast for ACV at the end of 1HFY21 was that Subscription ACV at the end of 1HFY21 was $17.7 million less than the forecast figure for Subscription ACV.
ASIC alleges that the non-disclosure of the 1HFY21 ACV Result was conduct engaged in by Nuix that was misleading or deceptive because there existed a reasonable expectation of disclosure of the 1HFY21 ACV Result in circumstances where during the period 18 January to 25 February 2021: (1)Â Â Â the Prospectus ACV Forecast caused, or contributed to, market expectations of: (i) year on year growth in ACV of approximately 20 per cent during FY21; (ii) an ACV at the end of 1HFY21 significantly higher than $162 million; (2) Nuix was aware of such market expectations; and (3)Â Â Â Nuix was aware of the 1HFY21 ACV Result, which reflected year on year growth in ACV of 3 per cent (compared to the ACV of $157 million at the end of 1HFY20), and a decline in ACV since the end of FY20.
The good news for Nuix shareholders is that the Federal Court has sided with Nuix and has ordered ASIC to pay all legal costs. However, the regulator does have a period of time to consider whether it will appeal the decision.
Nuix response
The ASX tech stock’s chair, Robert Mactier, was pleased with the court outcome. He said:
We are pleased that the Federal Court has resolved the allegations concerning Nuix’s early 2021 market disclosure and that the cases against both Nuix and the then directors of the company have been dismissed. We are committed to driving shareholder value, supporting our people and customers and using our products and services as a force for good.
The post Guess which ASX tech stock is rocketing 22% on big news appeared first on The Motley Fool Australia.
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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 recommended Nuix. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.