(Bloomberg) -- Ideanomics Inc., which owns technology used to charge electric buses and other commercial vehicles, has filed bankruptcy months after securities regulators accused its executives of misleading investors about its financial performance.
The New York-based company and its corporate affiliates sought court protection Wednesday in Delaware listing assets of between $50 million and $100 million and liabilities of between $100 million and $500 million on its Chapter 11 petition. Ideanomics joins several other EV makers and related business that have filed bankruptcy over the past two years.
The bankruptcy caps a years-long slide for Ideanomic’s stock, which surged in 2020 amid enthusiasm from Robinhood users. It traded for more than $600 a share for a short-time and the company’s market value hit $2 billion in February 2021 before losing most of that over the past two years. Nasdaq notified the company in July it would suspend trading of the stock.
An entity linked to Ideanomics Executive Chairman Shane McMahon has offered to fund the bankruptcy and has struck an agreement to acquire the firm’s assets, according to court documents. McMahon is the son of Linda McMahon, who expected to be nominated as President-elect Donald Trump’s nominee for education secretary, and Vince McMahon, the former chief executive officer of World Wrestling Entertainment.
Shane McMahon has been involved with Ideanomics since 2010 and was named executive chairman in 2021, according to the company. Tillou Management and Consulting LLC, an entity that’s controlled by Vince McMahon, has agreed to provide Ideanomics with an $11.6 million loan to fund the bankruptcy, according to court documents. Tillou has offered to credit bid the amount of the loan as well as other debt its owed to acquire Ideanomics’ assets.
A credit bid allows lenders to use debt they’re owed toward the purchase of a bankrupt company’s assets and would be subject to better offers, should any materialize in the coming weeks.
The Chapter 11 comes months after the US Securities and Exchange Commission announced in August that it had settled charges with Ideanomics and three of its executives over allegations the company mislead investors about its financial performance. The SEC alleged Ideanomics in November 2017 reported revenue guidance of $300 million even though “there were numerous facts known to company management” indicating it would miss that target by a wide margin.
Ideanomics and its executives “fully cooperated with the SEC” and settled the allegations without admitting to or denying the allegations, a company representative told Bloomberg Law in August. Ideanomics Chief Executive Officer Alf Poor said in a June earnings call that the company had divested from several businesses and investments over the past year and had been navigating challenges which have also negatively impacted its peers in the commercial EV sector.
Ideanomics grew by acquiring EV-related technologies including WAVE Charging in 2021. WAVE developed wireless charging pads for buses and other commercial vehicles that can be embedded in roads or depot facilities. The company disclosed a roughly $217 million loss from operations last year and drop in revenue from $19 million in 2022 to $15.45 million in 2023.
The case is Ideanomics Inc., number 24-12728, in the US Bankruptcy Court in the District of Delaware.
--With assistance from James Nani.
(Update includes information about Shane McMahon beginning in fourth paragraph.)
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