Lead Plaintiff Deadline: 08/27/2020
SUMMARY OF CASE:
A securities class action has been filed against Ideanomics, Inc. (IDEX) on behalf of all investors who purchased or otherwise acquired Ideanomics common stock between March 20, 2020 through June 25, 2020. This case has been filed in the USDC – S.D.N.Y.
On June 25, 2020, analyst Hindenburg Research issued a series of tweets in which it called Ideanomics “an egregious & obvious fraud.” As detailed herein, Hindenburg asserted that it found evidence that Ideanomics had doctored photos for use in its press releases to suggest that the Company owns or operates a vehicle sales center in Qingdao, China, when it in fact does not. Hindenburg further asserted that it had an investigator go to Ideanomics’ purported MEG Center in Qingdao, China, where the investigator was unable to find any trace of Ideanomics or its purported MEG Center.
Also on June 25, 2020, analyst J Capital Research issued a report on Ideanomics entitled “Champion of Promotes.” J Capital wrote, in part, that “Ideanomics . . . is a zero. The company changes its name and promotional story so frequently that it’s hard to keep up. One thing remains a constant, despite all the press releases, buzzwords and hype: shareholders get wiped out.” J Capital continued, in a tweet, that “[w]e called all the ‘buyers’ named in [Ideanomics’] press releases this month. Not a single one had made a purchase. One of them thanked us for alerting them to ‘fake news.’”
Then on June 26, 2020, the Company issued a press release in which it sought to “clarify the status” of its purported EV hub in Qingdao, China. In this releaseIdeanomics walked back certain of its prior statements regarding the MEG Center in Qingdao, stating that it was launching three phases of its MEG Center that will eventually total one million square feet. The first phase, according to Ideanomics, occupies only 215,000 square feet. 8. The stock price continued to plummet on June 26, 2020, dropping to a close of $1.46 per share. This represents a two day drop of approximately 53%.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) Ideanomics’ MEG Center in Qingdao was not “a one million square foot EV expo center”; (ii) the Company had been using doctored or altered photographs of the purported MEG Center in Qingdao; (iii) the Company’s electric vehicle business in China was not performing nearly as strong as Ideanomics had represented; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.