Ideanomics (NASDAQ:IDEX) Stock Forms Bearish pattern: A Good Time To Sell?
3:44 pm Thursday, July 29th, 2021
There are certain stocks that may be speculative in nature but that does not mean that those stocks are untouchable. Investors need to look a bit closer into the company’s business and then make a call. One of the stocks that could be included in that category is that of Ideanomics (NASDAQ:IDEX).
Back in June, the company had announced that it was going to acquire the rest of the stake in Solectrac, the electric tractor manufacturer, and become the 100% owner. However, the relatively positive news did not result in any major move in the stock and there’s a reason for that. Ideanomics paid as much as $18.1 million for the remaining 78.6% stake in Solectrac. The transaction valued Solectrac at $23 million.
On top of that, the bonuses and a total of three earnouts could cost the company several million, which would bring the total value of the transaction to $27 million. Ideanomics has also provided Solectrac with a capital of $12 million in order to turbocharge its business. In other words, the company has made a big bet on a company that is still a fairly expensive business to maintain and grow.
However, the company had a cash balance of $280 million at the end of March 2021, and hence, it might not prove to be a particularly big risk in the larger scheme of things. The growth strategy of Ideanomics is in two directions, one of those through an operating company and the other through a holding company. This has proved to be confusing for some investors and hence, Ideanomics remains a fairly speculative bet at this point.
