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Nextdc Ltd shares lower on legal spat

Credit: Patrick McKnight

Shares in data centre operator Nextdc Ltd (ASX: NXT) are down 0.8% to $6.77 in morning trade as the company wrestles with bad press from legal proceedings initiated by Asia Pacific Data Centre Group (ASX: AJD).

NEXTDC will defend claims it denied Asia Pacific Data Centre (ADPC) access to its three property sites in Sydney, Melbourne and Perth, as APDC attempted to allow prospective purchasers to inspect the real estate.

The fresh legal action comes after a 2017 issue involving 360 Capital Group Ltd (ASX: TGP), after 360 made an overture for a controlling stake in ADPC, which NEXTDC tried to block.

Investors are obviously spooked by the drama within NEXTDC ranks and the company trades at a very high PE ratio of 167.8, increasing its risk profile substantially.

A new player has emerged in the space recently, with Data Exchange Network Ltd (ASX: DXN) grabbing the attention of Macquarie Group Ltd (ASX: MQG) who took up a 5.4% holding in the company.

Other tech stocks to watch today include software company Bravura Solutions Ltd (ASX: BVS) and Xero Limited (ASX: XRO), both of which are down today after flying to 52-week high territory earlier in the week.

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Motley Fool contributor Carin Pickworth has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of Bravura Solutions Ltd and Xero. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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