Powered by
MOMENTUM
MEDIA
Class action firm Gordon Legal has initiated an investigation into potential class action proceedings against an ASX-listed giant.
NEXTDC is being investigated by Gordon Legal following a single-morning share price drop of over 40 per cent after NEXTDC slashed its FY2026–27 earnings guidance on 21 October.
It comes after the firm launched a landmark privacy class action against the Department of Veterans’ Affairs in October, alleging the unlawful disclosure of sensitive personal and medical information belonging to about 300,000 veterans and their families through the Veterans’ MATES program.
This current investigation is examining whether NEXTDC failed to promptly inform the market that delays to electricity infrastructure works at its M3 data centre in West Footscray would affect its financial forecasts.
The probe specifically covers the time frame during which NEXTDC secured $1.1 billion from investors via a convertible notes offering.
Additionally, Gordon Legal is examining whether NEXTDC had a proper basis for its HY26 guidance provided on 25 February, amid allegations of misrepresentation.
NEXTDC projected net revenue of $615–640 million alongside underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of $385–410 million in its FY26–27 guidance issued on 27 August 2026, with that guidance assuming additional capacity at M3 would proceed as planned.
On 31 August, following resident concerns, Jemena Electricity Network temporarily suspended portions of the power infrastructure upgrades required to support the planned expansion.
Following this, NEXTDC raised $1.1 billion through convertible notes, priced against a share price of $12.60.
Following a trading halt on 21 October, NEXTDC reduced its FY26–27 guidance to $475–500 million in net revenue and $245–265 million in underlying EBITDA, eliminating approximately $140 million in revenue connected to the affected M3 contracts.
Upon resuming trading, NEXTDC shares fell 42.3 per cent from their pre-halt closing price of $9.18 to open at $5.30.
Gordon Legal partner James Naughton said the investigation is focused on whether NEXTDC adequately notified investors of the potential effects of delays to critical power infrastructure works on its financial forecasts, and the losses suffered as a consequence.
“Many NEXTDC shareholders are ordinary Australians, including people investing for their retirement through self-managed super funds,” Naughton said.
“They saw almost $4 wiped off the value of every share they held in a single morning.
“NEXTDC told the market in late August what it expected to earn this financial year.
“Within days, the power upgrade those forecasts relied on had stopped.
“Our investigation is focused on whether and when NEXTDC knew its guidance was at risk.”
Naughton noted the investigation would also examine the timing of NEXTDC’s disclosures to the market and whether the company met its continuous disclosure obligations.
“We also want to know why investors weren’t told until 21 October, including those who put money into the $1.1 billion notes raising in September,” Naughton said.
“Listed companies have a legal obligation to keep the market informed of anything that could materially affect their share price.
“If that didn’t happen here, investors who lost money may be entitled to compensation.”
The proposed proceedings are considering potential infractions concerning continuous disclosure requirements alongside allegations of misleading or deceptive conduct under the Corporations Act 2001 (Cth), the Australian Securities and Investments Commission Act 2001 (Cth), and the Australian Consumer Law.
