Ideanomics (NASDAQ:IDEX) ("Ideanomics" or the "Company") today announced a response to the recent short-selling communications from J Capital and Hindenburg. According to their websites, these companies take short positions in publicly traded companies then disseminate very negative reports on these companies."After consultation with our legal counsel, we believe these communications, marketed as research are illegal or have been banned in many countries, but continue to operate in the grey areas of financial regulatory law in the United States," said Alf Poor, CEO of Ideanomics. Below are Ideanomics' initial response to the allegations published in these reports:
- J Capital alleged that Ideanomics does not have sufficient cash to fund operations for more than three months. This statement can easily be reconciled from the Company's recent series of filings of form 424B2 with the SEC, which clearly shows the company has raised capital in recent weeks and months.
- Hindenburg Research alleged that Ideanomics claims to own and operate a large-scale facility in Qingdao for its MEG division sales and that their investigators have been on-site and claim MEG does not have a presence there. Ideanomics has never claimed or disclosed ownership of the site. It holds a 15-year rent-free agreement which was signed by Ideanomics in Nov. 2019 and has since provided images to show its participation at the site. Hindenburg Research disseminated social media content regarding their conversation with MEG partner's sales staff with auto dealers at this site. We have since obtained statements from these staff members that refute Hindenburg's claims.
- J Capital has alleged it made inquiries with the local Qingdao city investment group for the Chengyang business district - Qingdao Chengyang Xinyang Investment Co. Ltd - and that they have no knowledge of Ideanomics or its MEG division. Ideanomics is providing government-issued registration of the venture with our Company, which is a matter of public record in China. Furthermore, the city investment entity has released details of its interest in the ventures, including a recent RMB 50 Million investment received by the Company in January 2020, as part of a potential series of investments, and recent media coverage in the People's Republic of China corroborates this.
- J Capital further alleges that it has inquired with recent deals signed by Ideanomics MEG division, and its subsidiaries, and that these companies deny having a business relationship with our Company. We have contacted each of the partners and they have provided statements confirming their business relationships with our Company, and have each applied their respective company seal for authenticity, in order to refute those claims entirely. These partners include Tianjin Zhongcheng order for 42 units of Toyota Land Cruiser, Jiudao Group for 400 units of Aoxin X30L EV, Beijing Silk Road Rainbow, and Qinou Group order of 200 units of Dong Feng Liuzhou S50EV for the City of Neijiang, Sichuan.
Detailed documentary proof to support Ideanomics response to these allegations can be viewed on the Company's corporate website at https://ideanomics.com/short-selling-activity/
The Company will continue to provide additional material it believes is required to refute the claims made by J Capital and Hindenburg and their sponsors.
Third-party Partner Quotes:
"Despite business disruption caused by the efforts to contain COVID-19, we are impressed with MEG's and our joint venture's progress," said Chengyang Chairman Liang Yong Chun. "We are pleased to have MEG as a partner and are enthusiastic about the bright future prospects for this joint venture."
Beijing Silk Road Rainbow Group General Manager, Mr. Wang Peng, stated, "We not only signed two partnership agreements with MEG, but we have an excellent working relationship and are actively pursuing for EV buses replacement programs in three cities and making great progress."
The PetroChina Chairman Xu Xingxiang stated that, "We are excited to work with MEG on energy sales and have propitious plans to lead the nation on test bed efforts across several areas."