Nuix floated on inflated forecasts at $5.31 — the stock hit $2.47 within six months

Nuix, the forensic data analytics company whose software helps enforcement agencies catch criminals, listed on the ASX in December 2020 at $5.31, climbed to almost $12 by January 2021 — and fell to $2.47 within six months of listing, a collapse former global vice-president Rolf Krolke told the ABC's 7.30 he was not surprised by. By his account the company was a 'dumpster fire' and 'crumbling apart' by the time it floated.

The unwind came fast: two earnings downgrades in April and May 2021, revelations in the Sydney Morning Herald that lawyer Mark Allen, acting for a Nuix insider, had warned ASIC before the float that the company could not achieve its forecasts and that its accounts had been restated without a full PwC audit, then allegations of insider trading, police raids, alleged breaches of director duties and continuous disclosure rules, and a line-up of class actions.

ASIC launched three investigations in 2021 — into the prospectus, into insider trading by CFO Stephen Doyle (who resigned), and into continuous disclosure breaches. It dropped the first two for 'insufficient evidence of unlawful conduct', and escalated the third to the courts, which Nuix is defending. In August 2023 a Senate inquiry into ASIC, spearheaded by Liberal senator Andrew Bragg, took up Nuix as a case study in how the regulator handles its biggest cases, ordering it to hand over investigation files; Krolke called Nuix 'a great example of a disaster that occurred right under them'.

The prospectus positioned the company, in Krolke's words, far beyond what he believed it could deliver — audacious goals with no runway to reach them.

Accounts were already strained pre-float: restated annuals that had not had a full PwC audit, and an insider so concerned a lawyer tipped off the regulator before listing.

Growth expectations met reality quickly — two earnings downgrades within four months of listing destroyed the forecast credibility the float price rested on.

ASIC dropping the prospectus and insider-trading investigations left the biggest questions unanswered, fuelling the Senate inquiry rather than closing the story.

An IPO prices a promise: when the company can't deliver the forecast, the market re-prices within weeks — and the dropped probes became a Senate case study in regulator timidity.

ASIC says its continuous disclosure case against Nuix is headed for trial, and it has opened a separate investigation into share trading by CEO Jonathan Rubinsztein, which Nuix says is 'nearing completion'. Nuix maintains its prospectus was 'entirely appropriate' and says it continues a turnaround. The Senate inquiry into ASIC demanded the Nuix files; ASIC has resisted, offering submissions and in-camera discussion instead, with the committee using its powers to order production.