Phi Finney McDonald is investigating a class action against Nuix Limited (Nuix) and third parties on behalf of investors who acquired Nuix shares on or before 29 June 2021, including in its initial public offering (IPO) pursuant to its prospectus dated 18 November 2020 (the Prospectus).

Background

Nuix is a company listed on the Australian Securities Exchange (ASX) that provides investigative analytics and intelligence software. It is headquartered in Sydney, Australia and maintains offices in a number of countries including in North America and the Asia Pacific region.

On 4 December 2020, Nuix listed on the ASX at an IPO price of $5.31. Its Prospectus contained extensive information about Nuix’s products, prospects, and historical and forecast financial performance, including earnings guidance for FY21.

On 26 February 2021, Nuix announced its HY21 results which included $85.3 million in statutory revenue, representing a 4% decrease from the previous year. However, Nuix insisted that it was still on track to meet its full-year prospectus earnings forecasts. The market responded strongly to the announcement and the company’s share price fell by approximately 32% by the close of trade.

On 21 April 2021, Nuix announced it had revised its forecast for FY21 and would not meet its Prospectus guidance. The company downgraded its forecasts as follows:

  1. pro forma revenue to $180-185 million (compared to $193.5 million forecast in the Prospectus); and
  2. annualised contract value (ACV) of $168-177 million (compared to $199.6 million forecast in the Prospectus).

Following the FY21 earnings downgrade, the company’s share price fell by approximately 15% by the close of trade.

On 17 May 2021, Nine newspapers revealed serious allegations about Nuix’s governance, ongoing underperformance issues before the IPO and the reliability of its financial reporting prior to listing on the ASX. The company’s share price fell by approximately 11% by the close of trade.

On 31 May 2021, Nuix disclosed that it would underperform even the revised revenue and ACV guidance it had provided on 21 April 2021, amounting to cumulative 8.3% and 15.6% shortfalls relative to the original FY21 guidance in its Prospectus. By the close of trade, the share price had fallen approximately 18%.

On the evening of 29 June 2021, Nine newspapers revealed that Nuix’s former CFO along with his brother and father were the subject of an ASIC criminal investigation into insider trading during the period 22 January 2021 to 12 February 2021, during which time the CFO is alleged to have passed on confidential information about Nuix’s poor performance to his brother. On the morning of 30 June 2021, Nuix issued an announcement confirming the investigation. By the close of trade that day, the share price had fallen approximately 13%.

Allegations

Phi Finney McDonald is investigating a class action against Nuix and third parties (including for their role in the IPO). Specifically, we are investigating whether:

  1. the Prospectus contained materially misleading statements or omissions;
  2. Following its IPO, Nuix engaged in misleading or deceptive conduct, and breached its continuous disclosure obligations;
  3. Nuix’s share price was inflated as a result of the alleged contraventions, and whether shareholders suffered loss and damage as a result.

 Class Action Registration

Current and former shareholders who acquired Nuix shares on or before 29 June 2021 are invited to register their interest in a potential class action by emailing classactions@phifinneymcdonald.com