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Why Ideanomics Stock Skyrocketed Today

By Evan Niu, CFA – Jun 29, 2020 at 11:52AM

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The embattled company continued to push back against short-sellers.

What happened

Shares of Ideanomics (IDEX -5.53%) have skyrocketed today, up by 52% as of noon EDT, after the company continued to refute allegations of fraud made last week by short-sellers. Ideanomics put out a press release detailing its rebuttals and another announcing that it had fulfilled multiple orders for electric vehicles (EVs).

So what

Ideanomics disputed the charge that it is running out of cash, pointing to recent regulatory filings with the SEC. One of the short-sellers, Hindenburg Research, said it sent an investigator to Ideanomics' Mobile Energy Group (MEG) facility and that people working there were unfamiliar with Ideanomics. The company fired back: "We have since obtained statements from these staff members that refute Hindenburg's claims."

The other prominent short-seller, J Capital, alleged that recently announced business deals were essentially fabricated. Ideanomics CEO Alf Poor provided statements from various business partners.

Green stock chart going up

Image source: Getty Images.

"After consultation with our legal counsel, we believe these communications, marketed as research are illegal or have been banned in many countries, but continue to operate in the grey areas of financial regulatory law in the United States," Poor said in a statement.

Now what

Ideanomics said that its MEG subsidiary has completed delivery of numerous EV orders representing 117 units with a total value of 22.5 million yuan, or approximately $3.15 million. One customer has another order for 360 units due for delivery in July once financing is completed tomorrow, according to Ideanomics.

"Today's announcement represents Ideanomics' ability to build momentum and fulfill orders on time, and in some cases ahead of schedule, even during COVID-19," added Poor. "Our team is dedicated to working swiftly to advance our customers' needs and will continue to do even more as the world reopens."

Evan Niu, CFA has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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