After several tumultuous months of trading, the Nuix Ltd (ASX: NXL) share price is showing glimmers of hope. At the end of trading today, shares in the investigative data analytics software company were up 9.47% to $2.66.
With no news out from the company today, we look back through recent activity to understand where investors might be sourcing their change of heart from.
New management, who dis?
The embattled software company has been caught in a whirlwind of allegations following its listing on the ASX. A flurry of earnings downgrades rose some eyebrows, and from there it has been all downhill.
After much controversy, it was announced last month that both the chief executive officer (CEO) and chief financial officer (CFO) would be bidding farewell.
Ordinarily, investors would be concerned with a change of leadership. However, given the circumstances for Nuix, it might be providing a change in sentiment.
The spot of CFO has been temporarily filled by former Star Entertainment Group CFO, Chad Barton. However, CEO Rod Vawdrey remains in his role until a suitable replacement is found.
From bad to worse
The feeling of relief for investors was all but momentary. Shortly after the leadership transition news, it was reported the company's Sydney office had been raided by law enforcement. As you might have suspected, the Nuix share price didn't fare too well on this revelation.
According to reports, the Australian Federal Police (AFP) issued a warrant which was tied to the apprehension of documents relating to an individual's affairs. Nuix stated the event had nothing to do with the company itself.
Following on from that, authorities revealed late last month its investigations into alleged insider trading. The individual at the centre of the investigation is the recently resigned CFO, Stephen Doyle, and his family.
The court papers show the brothers are accused of trading Nuix shares with knowledge of inside information over January and February this year, as The Sydney Morning Herald first reported.
Well, why the Nuix share price resurgence?
Often there's a level of increased volatility when share prices sink to lows. Speculators might come in with the perspective of a turnaround story, others may simply see 'value' at these lower levels.
The other aspect to consider is short selling. While all hell is breaking loose, which has been the case in the past for Nuix, it garners the interest of short sellers. But with things quieting down, short sellers might be taking some profits by buying back Nuix shares. As a consequence, the share price is pushed higher.
Lastly, a notice filed yesterday shows UBS Asset Management increased its shareholding in the company on 5 July 2021. Specifically, the asset manager increased its holdings from 16,679,953 shares to 20,625,110.
