Inpixon (NASDAQ, INPX) has been something of a disaster for stockholders, it's down 96% over just the past 12 months. Endless dilution and not much happening. Except, of course, there has been something. There's that spin off of CXApp (NASDAQ: CXAI) and its Spac'd arrival on NASDAQ. Where CXAI stock jumped 345% in just the one day Thursday. Well, that's exciting, right? And surely there will be some value accruing to INPX stockholders from the success of CXAI?
To which the correct answer is yes, absolutely. The way we read the documentation - we do not claim to be perfect on such matters but we think we've got this right - Inpixon stockholders gained 50% of the combination of CXApp and the Spac company, Kinz Technology Group (NASDAQ: KINZ). Therefore, given that CXAI has jumped 345%, there must be a useful rise in INXP to accompany it, right? Except now, again as we read it, that's not what is happening here.
Inpixon stock price from NASDAQ
As that documentation of the deal tells us: “PALO ALTO, Calif., March 14, 2023 /PRNewswire/ -- Inpixon® (Nasdaq: INPX) today announced the completion of the expected tax-free distribution ("Distribution") of 100% of the outstanding capital stock of its subsidiary CXApp Holding Corp. on a pro rata basis to holders of Inpixon's outstanding capital stock and certain other securities of record as of March 6, 2023 ("Inpixon Securityholders").”
There is indeed value flowing to Inpixon stockholders. But it is those holders of record on March 6th, the distribution of the CXApp stock has already happened. There is no retained rump of stock within Inpixon. Sure, Inpixon stockholders have benefitted - but the important part there is the tense of “have”. It's not are, or will, it's they have.
As we say we'd not pretend that we are perfect in our readings of such deals and term sheets. But we do think that we've got it right here. Inpixon stock has jumped because CXApp has. But there's no longer any financial connection between the two companies. The CXAI stock has already been distributed to INXP owners, there's no more to come.
Thus we expect INXP to come right back down again. Do note, expect, not know.
