Hello everyone,
On Tuesday night, the New Castle County Council take a look at a resolution that would allow County Executive Matt Meyer to negotiate an agreement with the new owner of the Delaware Board of Trade that would repay a controversial $3 million loan with stock.
The loan for the Board of Trade had been secured by the software that runs its trading system.
The new owner, Ideanomics now wants to replace the software and compensate the county via stock in the New York company. Ideanomics has a technology center in Connecticut and offices in Beijing.
At first glance, taking stock looks like a bad idea unless the shares are immediately sold at a guaranteed price, without commissions and other charges.
It is hard to see the stock as a long-term holding. Stock in Ideanomics has traded at more than $5 a share in 2018, but as of Monday stood at $1.10. That’s hardly a widows and orphans stock.
In 2015, Former County Executive Tom Gordon, pushed for the funding for the Board of Trade as part of his economic development strategy that for a time focused on building another port on the Delaware River.
In making the case for the loan, he noted that the interest rate was higher than amount earned from the park fund where it resided. In other words, the county became a bank.
Even at that time, the idea of using software as collateral was controversial, since its value can evaporate with new technology. (Anyone want to buy my old version of QuickBooks?). Others wondered why the venture could not find $3 million elsewhere.
The Board of Trade has muddled along in downtown Wilmington while remaining current on the loan.
The venture has retained a handful of employees, far fewer than the number touted by backers of the venture. Early projections called for the venture to attract highly paid traders along with support staff.
One way or another, the county wants its loan money back. As a taxpayer and user of county parks, cash is my preference.
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