Ideanomics (NASDAQ: IDEX) stock price has been in a freefall in the past few months as concerns about the company continue. The shares plunged to a record low of $0.018, which was about 99.9% below the highest level on record. On Monday, the shares more than doubled ahead of a planned delisting by Nasdaq.
What is Ideanomics?
Ideonomics is a company that seeks to change the electric vehicle industry. It aims to achieve that by bringing vehicles, charging, and financing solutions under one roof. It does thsi using Ideanomics Mobility, Ideanomics Energy, and Ideanomics Capital. Mobility connects fleets with the right EVs while energy provides charging infrastructure.
Ideanomics has struggled to gain traction as losses have increased dramatically. The company’s net loss jumped to over $282 million in 2022 from the previous $257 million. This happened even as its revenue soared to over $100 million in 2022.
Its balance sheet has also gotten a bit tight, with cash moving from $269.9 million in 2021 to over $21.9 million in 2022. In the most recent quarter, the company’s revenue dropped by 35% to $17 million while its loss per share came in at 30 cents.
The results also showed that the company needs more money to fund develoment. It needs about $90 million to fund its Energica and Solectrac businesses. It also needs about $100 million for its VIA product.
Therefore, with interest rates rising, and with regional banks being under tight liquidity, there is a likelihood that the company will struggle to raise debt financing. And with its stock being almost worthless, it will be impossible for the company to raise equity.
IDEX stock delisting delayed
The IDEX stock price more than doubled on Monday. This happened on the same day that the stock was due for delisting. Nasdaq has rules that all companies must follow to remain listed in the exchange.
One of these rules is that a company’s shares must remain above $1 for 30 straight days. IDEX shares have remained below $1 since April last year. It first received this warning in May last year.
Ideanomics received another notice of delisting on April 20th. Therefore, since the stock is still being traded, there are signs that the company launched an appeal The company said:
“Unless the Company timely requests a hearing on an appeal of this determination by the Staff before the Nasdaq Hearings Panel, which will stay the suspension of the Company’s common stock pending the panel’s decision. The Company plans to timely submit a hearing request to Nasdaq’s Hearings Department..”
Therefore, this appeal explains why the Ideanomics stock price surged on Monday. Still, I believe that the company is not a good investment. It is a thinly-traded company that has limited chances of success amid high capital requirements.
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