The S&P/ASX 200 Index (ASX: XJO) ended up having a fairly flat day of trading this Thursday, despite a short-lived midday rally. The ASX 200 ended up closing at 7,415 points, up a measly 0.02% for the day. However, the Nuix Ltd (ASX: NXL) share price performed even more poorly.
Nuix shares closed this Thursday at $2.97 a share, down 1% on the dot.
However, zoom out a little and the picture looks a lot prettier. Nuix shares have been on something of a tear lately, despite today’s dip. Since last Thursday’s close, the Nuix share price has risen from $2.53 to today’s close of $2.97. That’s a very pleasing gain of 17.39% in just one week.
This sudden rise would be a welcome change for Nuix shareholders. This company has made an unfortunate reputation for itself as something of an ASX initial public offering (IPO) flop. Since it debuted on the ASX boards last December, Nuix shares have had a pretty woeful time. When it IPOed back on 4 December 2020, this company quickly rose as high as $9 a share (up close to 70%). By January it had hit an all-time high of $11.86 a share.
But unfortunately for investors, that proved to be the best it got for Nuix, at least until this point in time. The company is now down more than 73% from those highs on today’s pricing.
Nuix has been steadily falling since hitting that high watermark, bottoming out at a low of $2.16 a share back in June. Today’s share price is the highest the company has seen since May.
So what’s turned the ship around for Nuix over the past week or so?
Why has the Nuix share price staged a recovery?
Well, unfortunately, it’s not clear why Nuix has been rising over the past week especially. There has been no major official news, developments, or announcements out of the company. It’s possible some investors decided the company was too cheap to ignore at the levels it was asking a week or two ago, and decided to buy up shares.
It’s also possible that investors have been influenced by some fund managers bullish on Nuix. One such fundie is Peter Switzer, founder of Switzer Financial Group.
As my Fool colleague Tony covered earlier this week, Switzer was extremely bullish on Nuix shares at their recent levels. Here’s some of what he said:
Analysts believe [Nuix] has a target price that suggests it could go up 156%… Even if they’re only half-right, I’d be happy with half of 156%…
It has huge customers in both the public and the private domain and it was a hugely successful company until all this misreporting really lowered the boom…The potential for the company still is certainly believable.
Perhaps investors took Switzer at his word.
Whatever the reason for Nuix’s recent success, it will no doubt be received very warmly from this company’s shareholders.
At today’s closing Nuix share price of $2.97, this company has a market capitalisation of $942.42 million.