Ideanomics (NASDAQ:IDEX) stock should be up 12,500% at the market open. The 125x surge in IDEX stock isn’t the case, but unfortunately the company is finally getting it right. Instead, it is a defensive and technical move designed to ensure NASDAQ price continuity. It doesn’t offset the past performance of the stock price at all.
What Ideanomics does: “Ideanomics, Inc., through its subsidiaries, develops zero-emission mobility solutions for the off-highway and on-highway commercial vehicle markets in Asia, Europe and the United States. The company’s Ideanomics Mobility business is focused on the commercial adoption of electric vehicles (EV) by commercial fleet operators. This business unit provides solutions for the procurement, financing, charging and energy management needs of commercial electric vehicle fleet operators. and zero-emission mobility solutions, such as the provision of commercial electric vans, trucks, buses, electric tractors, and two-wheeled transportation—everything that means electric vehicles. Unfortunately, it doesn’t do that very well. That may not necessarily be the reason for the decline in the share price.
Ideanomics stock price from Google Finance
Sure, Ideanomics has other issues as well, but its stock price alone is one. Nasdaq has a minimum bid of $1. If you fall below this price long enough, you lose the market quote. That’s a problem because it makes raising new capital significantly more difficult — raising new capital would be something Ideanomics definitely needs to do.
So something needs to be done, which is to explain that 125 old shares is a new one. A 1:125 Reverse Stock Split: “Ideanomics, Inc. (IDEX) will execute a one for one hundred twenty-five (1:125) reverse stock split. The reverse stock split will be effective Friday, August 25, 2023.”
This does not change anything in the valuation of the company and an individual holding. It just changes the number of shares they are made up of. Therefore, the stock price changes mechanically at the same rate — 12,500%, or 125x.
The reason for all this is merely the custom or even fashion in the New York markets. Penny stocks are considered the home of charlatans and scammers. Not all penny stocks are rigged, but the rigged stocks are usually penny stocks. So the $1 minimum bid price on the major New York stock exchanges. Shrug, their markets, we all have to play by their rules.
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