Shares of Ideanomics (NASDAQ:IDEX) are falling today, down by 7% as of 1:13 p.m. EST, after the company reported third-quarter earnings. Ideanomics also received a notice of delisting from the Nasdaq exchange since the bid price has closed below $1 per share for the last 30 consecutive business days.
Revenue in the third quarter was $10.6 million, largely coming from the company's Mobile Energy Group (MEG) segment, which distributes electric vehicles to commercial customers. Gross profit was approximately $700,000 and Ideanomics posted an operating loss of $12 million. The company attributed greater losses to lower gross profit. Ideanomics finished the quarter with $27.6 million in cash on hand.
"The MEG division in China, Treeletrik in Malaysia, and Medici Motor Works and Solectrac in the U.S. are all progressing toward our objectives for the remainder of 2020, and into 2021 and beyond," CEO Alf Poor said in a statement. "Strong growth in our taxi and ridesharing business is continuing and we are beginning to bring other revenues online in Q4, including activity in the bus segment of our business."
Ideanomics recently invested in California-based electric tractor maker Solectrac in an effort to get greater exposure to other specialty commercial vehicles.
The company disclosed that it received a notice from the Nasdaq on Nov. 3 warning that Ideanomics stock has fallen below the required $1 minimum threshold. The exchange has granted Ideanomics a 180-day grace period (until May 2, 2021) to regain compliance.
Generally speaking, companies sometimes implement reverse splits, which do not alter fundamentals, to artificially increase their stock prices in order to regain compliance.