Investment in Privately Held Company On May 20, 2022, the Envestnet, Inc acquired a 25.0% interest in a privately held company for cash consideration of $5.0 million. Subject to the occurrence of certain conditions, the Company agreed to invest up to an additional $10.0 million for additional units in the future. The Company uses the equity method of accounting to record its portion of this privately held company's net income or loss on a one quarter lag from the actual results of operations. The Company uses the equity method of accounting because of its less than 50% ownership interest and lack of control and does not otherwise exercise control over the significant economic and operating decisions of the privately held company.

Did this event is a main reason for the drop of share price of Envestnet Inc on May 23th 2022? Explain.

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The event you described where Envestnet Inc acquired a 250 interest in a privately held company for ... View the full answer