Ideanomics (NASDAQ:IDEX) stock has had a wild ride in 2021. But it’s ending right where it started.
Shares opened Oct. 22 at $1.94 a piece. That’s a market cap of $95o million, right about where it started the year.
During January, however, small investors’ excitement over electric vehicles sent the stock price up to more than $5 a share. Those who sold Ideanomics stock in early February — say, at the $5.43 closing price on Feb. 8 — have fond memories and money in their pockets.
Those who bought Ideanomics stock from them have suffered. After months of bouncing between $2-3 a share, IDEX stock has been falling steadily since July. It’s still selling at over 7 times its anticipated 2021 sales. But it might be worth a second look.
What’s Changed on IDEX Stock
Back in January, InvestorPlace writers were covering Ideanomics extensively. Will Ashworth called it the Jackson Pollack of clean energy, a hodgepodge combining part of an electric tractor company and an investment arm. Todd Shriber said it had a quirky business model. Our research staff said, simply, avoid it.
Since then Ideonomics has bought a components business called US Hybrid, a tractor maker called Solectrac, a commercial fleet builder called VIA Motors, and most of an Italian motorcycle maker called Energica.
What it hasn’t shown is much growth. Third quarter revenue, due to be announced Nov. 15, should be slightly below what it took in for each of the first two quarters. Losses for the nine months would total $16 million, on revenue of slightly under $100 million.
Still Offering Promises
The irony is that all Ideonomics’ investments offer promising ideas.
The electric motorcycle looks sharp. It has an industry-standard DC Fast charger, and it complements an existing Ideanomics business in Malaysia. VIA plans to make a wide range of commercial vehicles from a common “skateboard” platform, with batteries near the ground.
Ideanomics’ WAVE unit has an interesting wireless charging technology. Our Chris MacDonald wrote recently about a collaboration with Kenworth on charging pads for tractor-trailers. “This company is thinking outside of the box,” he concluded.
Trouble is, none of these businesses are generating much revenue. You can announce all the electric tractors, motorcycles, and tractor-trailer charging pads you want. But if they don’t sell, investors have nothing to buy.
Investors also don’t have much to go on. Yahoo lists just one analyst, who sees 10% growth on this year’s numbers for 2022. Our Will Ashworth wrote in July, after the Solectrec deal, that Ideonomics wasn’t getting any cheaper. It’s down 23% since then.
Chief revenue officer, Kristen Helsel, spoke at an investor conference recently, with Ideanomics concluding that it “checks all the boxes.”
That’s nice, but as they say, “it don’t feed the bulldog.”
The Bottom Line
The good news is that, if there are markets for what Ideanomics is selling, it can wait for them to develop.
Multiple capital raises boost Ideanomics’ coffers to nearly $400 million in cash at the end of June. Its operating cash flow burn during the second quarter was just under $13 million.
But a business is more than a collection of good ideas and investor money. At some point you must deliver the goods and cash some checks.
If you think Ideanomics can do that, you can get the stock at a low price right now. If just one of these businesses takes off, whether wireless charging, electric trucks, electric tractors or even the motorcycle business, the stock would follow.
But that’s pure speculation right now. Don’t buy unless you’re willing to lose your stake. Don’t complain to me if you do.
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On the date of publication, Dana Blankenhorn held no positions in companies mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Living With Moore’s Law: Past, Present and Future available at the Amazon Kindle store. Write him at firstname.lastname@example.org or tweet him at @danablankenhorn. He writes a Substack newsletter, Facing the Future, which covers technology, markets, and politics.