Ideanomics Inc. (OCT: IDEX) entered an imaginary boxing ring where it wins and loses rounds. The international company is known for specializing in the commercial electric vehicle industry, developing financial services and Fintech products. While new orders are being processed, the company is accused of fraud by short-sellers.
Indictment against Ideanomics
The blows fall where, through various law firms, charges are filed against Ideanomics. These are several materially false and/or misleading statements that have not been shared and revealed. It would not have been honest about the size and status of the MEG center, the company had been using doctored or altered photographs of the purported MEG Center in Qingdao and the vehicles are said to be underperforming. As a result, investors would have been misled by false information. The goal now is to recover damages for investors under federal securities laws.
On June 25, two research firms accused Ideanomics of fake electric vehicle contracts and publishing a false impression by creating an image of an operational MEG center when this was not the case. According to earlier reports, the area in question was one million square metres. On 26 June Ideanomics responded with an official press release talking about three phases for the MEG center. According to the company, this caused the confusion and the first phase is currently 215,000 square feet.
What is the effect on the stock market
As a result of these announcements, the share price fell by more than 50% to a minimum of $1.32 per share. Last Friday the blow was clearly visible after which it rose again to a maximum of $2.25 per share at the beginning of this week. Currently the share stands at $2.01 and we see it rise shortly after the market opened and then fall back again in the afternoon. That the company experienced a decent rise today is probably due to a previously received order of 500 Jiangsu AOXIN X30L models. 40 models would have been delivered today including all necessary documentation, permits and registrations. For another 360 models, the financing is secured. The other 100 models still need financing. According to Ideanomics this needs to be completed within some weeks.
Read here the respons of Ideanomics earlier.
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