Why did Nuix (ASX:NXL) shares retreat after spiking 26%?
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Why did Nuix (ASX:NXL) shares retreat after spiking 26%?

Story Highlights

Nuix shares surged on buyout rumours, but fell back after the company said none were forthcoming.

Nuix (NXL) shares surged more than 25% in the morning of September 9. However, the stock retreated in the afternoon, with its gains coming down to about 15%. The sharp fluctuation in NXL stock stemmed from buyout rumours.

Nuix provides analytics and intelligence software. Its customers include governments, law firms, and corporations. 

Nuix responds to takeover rumours

The surge in Nuix shares followed a report in The Australian newspaper that the company was about to receive a buyout bid from U.S. software company, Reveal. In response to the media speculation, Nuix issued a statement, clarifying that it had not received a buyout proposal from Reveal. 

Trading in Nuix shares was temporarily halted following the surge in the stock as a result of the takeover speculation.

Nuix insider purchase

The Nuix takeover rumours come at a time when the company’s insiders are showing confidence in the stock.

Nuix CEO Jonathan Rubinsztein recently purchased 350,000 company shares in a series of transactions made between September 6 and September 8, according to the TipRanks insights. The executive invested more than $AU236,000 as part of the share purchases.

Nuix share price forecast 

Nuix shares have declined around 70% year-to-date. According to TipRanks’ analyst rating consensus, Nuix stock is a Hold. The average Nuix stock price forecast of $0.90 implies about 5.3% upside potential. 

Final thoughts

The spike in Nuix shares on buyout rumours suggest that investors believe that a takeover deal could result in a favourable exit.

While Nuix may eventually receive a buyout proposal from Reveal or other companies, the company could still reject the offer. Therefore, Nuix stock is worth approaching cautiously, as it could become a takeover battleground.



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