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.
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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.