Nuix (ASX:NXL) share price falls amid more reports of options package

Once again, an options package sold to Nuix’s former-chair is in the spotlight.

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Shares in Nuix Ltd (ASX: NXL) are once again falling amid media reports about the controversial options package besieging the company. The Nuix share price closed at $2.62 today, 0.76% lower than its previous closing price.

The latest fall for Nuix’s shares has come at the same time as reports claim the company must provide evidence it didn’t backdate an options package given to former chair Tony Castagna.

Let’s take a closer look the headlines facing the embattled software company today.

Reported demands

According to the Australian Financial Review (AFR), a court has ordered Nuix to produce the paper trail of the options package by the end of the month.

The court case in question is between the company and its former-executive Eddie Sheehy.

Previously, the AFR, The Age, and The Sydney Morning Herald published a joint investigation into Nuix. Part of the investigation examined Castagna’s options package.

The reports alleged there was a gap in the company’s reporting of Castagna’s 300,000-strong options package, which his company purchased for $3,000 in 2005.

According to the publications, the options were supposedly issued in 2005, yet weren’t mentioned again until 2011. They questioned whether the options were issued in 2011 and backdated to 2005. The options would have been worth $1.8 million in 2011.

The options were supposedly cashed out for $80 million in Nuix’s initial public offering (IPO).

Sheehy vs Nuix

As The Motley Fool Australia has previously reported, Sheeny is taking legal action against Nuix over options within his 2008 renumeration package.

Sheehy claims a 50 to 1 share split conducted in 2017 should have included his options.

Nuix argues Sheehy’s options didn’t fit the criteria for the share split.

Sheehy is now suing Nuix for $200 million of damages – which he believes the share split cost him.

Nuix share price snapshot

Nuix has given ASX watchers one of the most memorable performances of 2021 so far.

Since its December IPO – where its shares were trading for $8.01 – the Nuix share price has fallen 67%.

The company has market capitalisation of around $837 million, with approximately 317 million shares outstanding.

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended Nuix Pty Ltd. The Motley Fool Australia has recommended Nuix Pty Ltd. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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