The hard questions we have to contemplate are: Why has the market not liked Nuix's trading update? Are they anticipating loss of the court case which would add further costs in the form of penalties? And then the class action legal costs will further eat up the EBITDA. That would generate FY results below expectations as well?
It's clear that this trading update was 'poor'. Or it was not enough with all that they are trying to do with the business.
Investors might be expecting the earnings to atleast be good enough to absorb the legal costs and still generate positive EBITDA. That would comfort them. Afterall we have the looming class action and if legal costs keep on affecting EBITDA by 20% or so, it's causing worry with the limited tight funds at hand.
NXL Price at posting:
$1.61 Sentiment: Hold Disclosure: Held
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