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The Nuix Ltd (ASX: NXL) share price is edging lower in late afternoon trading, down 1.4%.
This comes as Macquarie Group Ltd (ASX: MQG) CEO, Shemara Wikramanayake, acknowledges that investors in Nuix’s initial public offering (IPO) will be disappointed with how the Nuix share price has performed since its 4 December listing.
What’s Macquarie’s connection with Nuix?
As my Foolish colleague Brooke Cooper reported on 29 July:
Macquarie was Nuix’s backer during the tech company’s ASX debut. Macquarie was also Nuix’s biggest shareholder, holding around 70% of the tech company before its float. Today, Macquarie holds around 30% of Nuix’s shares.
Although Macquarie has denied any wrongdoing in its role with the Nuix IPO, corporate regulator ASIC has been investigating why the ASX tech share has failed to meet its prospectus forecasts.
The fledgling company has already issued 2 profit downgrades. And investors have taken note.
At the current $2.53, the Nuix share price is down 77% since the closing high of $11.05 per share on 22 January.
Not everyone has lost money on the IPO though.
As the Australian Financial Review notes, “Macquarie… was the IPO’s primary beneficiary, taking out $565 million.”
The AFR adds that, “The ongoing presence on the Nuix board of Dan Phillips, who is head of Macquarie’s venture capital group, makes it hard for Wikramanayake to distance the group from the debacle.”
Wikramanayake, however, points to the fact that Nuix is an independent listed company, in which Macquarie owns a minority stake of 30%.
Adding that Macquarie believes in Nuix’s technology platform, she acknowledged, “We respect that investors who’ve come into the IPO have been disappointed, and it takes a long time to win back trust when that happens.”
More broadly, Wikramanayake commented:
You can make mistakes as you go into new areas, and you’re constantly having to learn. And what we do through diversification and the risk management is make sure they’re little mistakes that can’t bring Macquarie down. But mistakes happen, and you learn quickly and respond to them.
Nuix share price snapshot
The Nuix share price is down 69% since its first day of trading on 4 December last year.
Year-to-date the picture looks even worse, with Nuix’s share price tumbling 71% in 2021. By comparison the All Ordinaries Index (ASX: XAO) has gained 12% this calendar year.
Should you invest $1,000 in Nuix right now?
Before you consider Nuix, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Nuix wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of August 16th 2021
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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.