Ideanomics, Inc. Class Action Lawsuit
- Company Name
- Ideanomics, Inc.
- Stock Symbol
- Class Period
- March 20, 2020 to June 25, 2020
- Southern District of New York
The Ideanomics, Inc. class action lawsuit charges Ideanomics and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of Ideanomics common stock between March 20, 2020 and June 25, 2020, inclusive (the “Class Period”). The Ideanomics class action lawsuit was commenced on June 28, 2020 in the Southern District of New York and is captioned Lundy v. Ideanomics, Inc., No. 20-cv-04944.
Ideanomics purports to be a global company focused on facilitating the adoption of commercial electric vehicles (or “EVs”) and developing next generation financial services and Fintech products. In recent press releases, Ideanomics has lauded its “one million square foot EV expo center in Qingdao, Shandong Province,” in China, also known as the Company’s Mobile Energy Global (“MEG”) Division, or the “MEG Center.” According to Ideanomics, the MEG Center is “the largest auto trading market in Qingdao,” China.
The Ideanomics class action lawsuit alleges that 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) Ideanomics had been using doctored or altered photographs of the purported MEG Center in Qingdao; (iii) Ideanomics’s electric vehicle business in China was not performing nearly as strong as Ideanomics had represented; and (iv) as a result, Ideanomics’s public statements were materially false and misleading at all relevant times.
On June 25, 2020, analyst Hindenburg Research issued a series of tweets in which it called Ideanomics “an egregious [and] obvious fraud.” Hindenburg also asserted that it had found evidence that Ideanomics doctored photos for use in its press releases to suggest that Ideanomics owns or operates a vehicle sales center in Qingdao, China, when it in fact it does not. Also that day, analyst J Capital Research issued a report concluding that “Ideanomics . . . is a zero. [Ideanomics] 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, stating 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.’” On this news, Ideanomics’s stock price fell approximately 21%.
Then on June 26, 2020, Ideanomics issued a press release in which it sought to “clarify the status” of its purported EV hub in Qingdao, China. In this release, Ideanomics 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 would eventually total one million square feet. The first phase, according to Ideanomics, occupies only 215,000 square feet. On this news, Ideanomics’s stock price fell an additional 40%.
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