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.
The post Nuix (ASX:NXL) faces yet another indignity appeared first on The Motley Fool Australia.
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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.
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