Shares of Alarum Technologies (ALAR) slid 10% to $1.82 on September 23 as a growing wave of securities-fraud class actions intensified pressure on a company whose core product was seized by federal agents nearly three months ago. The stock has now lost roughly 77% since the FBI moved against its subsidiary on July 2 — and investors still don't have second-quarter results to assess the damage.

  • The FBI Called Its Main Product a Botnet, and Multiple Law Firms Agree That's a Problem. On July 2, the FBI seized hundreds of domains associated with NetNut, the residential proxy network that is Alarum's primary business.

Google and security researchers say NetNut's proxy capacity was tied to Popa, a botnet of at least two million consumer devices enrolled with little or no meaningful user consent.

The lawsuit alleges NetNut was linking customer home internet devices into another network without consent, allowing cybercriminals to conceal their locations — and that Alarum's management hid this legal exposure from shareholders. The class period covers purchases between March 20, 2025 and July 2, 2026. At least five law firms are now competing for lead plaintiff status, with an October 5, 2026 deadline to file.

  • The Numbers Before the Crisis Looked Strong — Which Makes the Fallout Worse. Q1 2026 revenue grew 64% year-over-year to $11.7 million, with net income of $0.6 million and adjusted EBITDA of $2.1 million.

Alarum carried no debt and held $24.2 million in cash as of March 31. But those results predate the seizure. Shares fell roughly 67% to about $2.62 by July 8 alone. The market cap now sits at just ~$16 million — a micro-cap shell of its former self.

  • Delayed Earnings Leave Investors Flying Blind. On August 27, Alarum delayed the release of its second-quarter 2026 financial results.

The company itself warned the seizures may have "a material adverse effect on its operations, financial results and ability to serve some customers." Without Q2 numbers, there is no way to gauge how much revenue NetNut's shutdown has already destroyed — or how fast cash is burning on legal defense.

  • The Stock Is Pricing in Existential Risk, Not Just Litigation. Alliance Global Partners downgraded Alarum to Neutral on July 7.

Both netnut.com and netnut.io remain under FBI seizure banners as of late July. With the company's core proxy infrastructure effectively offline, customer migration to rivals is likely accelerating. Alarum's pivot to AI data services, touted in Q1 filings, is meaningless if the network those services relied on no longer exists.