Mullen Automotive Stock Forecast: MULN jumps 57% in Thursday premarket trade
- Mullen hired a law firm to take naked short sellers to task.
- MULN stock has gained 57% in Thursday’s premarket.
- Mullen stock has jumped from $0.10 to $0.27 in just 48 hours.
- 22 cargo vans sold to dealershiop in late June become first product revenue.
Mullen Automotive (MULN) stock has gained 57% in Thursday’s premarket to trade up to $0.27.
A popular penny stock, Mullen’s share price tacked on another 11.4% afterhours on Wednesday following the regular session’s 69.4% explosion. The reason behind the rally was Mullen management hiring a law firm to go after naked short sellers.
MULN stock lifted up from $0.10 at the start of Wednesday trading to just above $0.19 per share by the close of the afterhours session. This is likely due in part to short sellers closing some of their positions, resulting in a short squeeze.
Mullen stock news: Hiring Christian Attar law firm
The euphoria surrounding Mullen stock is a product of the company hiring the Christian Attar firm to bring charges against alleged naked short sellers and others who it believes have attempted to manipulate the MULN stock price. Naked short selling is when a market participant sells short a particular stock without first borrowing actual shares. This illegal practice allows traders to short more of a given stock than the number of tradable shares existing in the market.
Formerly called the Christian Levine Law Group, Christian Attar will work in partnership with Warshaw, Burstein and LLP to combat the alleged market manipulation. Mullen said it has received reports from a company called ShareIntel that such naked short selling has occurred in the recent past.
The most recent information shows that slightly more than 27 million shares of MULN stock was sold short, according to financial news website Benzinga.com.
“Since our announcement on April 28, we have been actively investigating naked short selling, and we now have enough intel to have the law firm actively investigate and, where justified, take action against any market manipulators using naked short selling, spoofing or other illegal acts,” said CEO David Michery in a statement.
Lost on no one is that the electric vehicle manufacturer’s extreme dilution in the first half of 2023 is the major culprit in the MULN share price losing nearly 98% of its value this year alone. In order to ramp up production of its Mullen One delivery van and its Mullen Three cab chassis, Mullen sold on the order of 2.3 billion shares and/or warrants. This grew the overall share count by about 10 times over.
Mullen had a cash position of $235 million as of June 23, which Michery says should give the company a 12-month runway at least. Mullen can also finally leave its mantle as a “pre-revenue” company behind. On June 29, the company announced that it had sold 22 Mullen One EV cargo vans to Randy Marion Automotive – a dealership based in North Carolina – for $308,000. This is the first official revenue the company has received, and it will be reported on Mullen’s second-quarter results.
Mullen Automotive FAQs
Mullen Automotive is a publicly-traded development-stage electric vehicle company based in Brea, California that typically uses outside partnerships to manufacture its vehicles. The company was founded in 2014 and currently sells self-designed electric delivery vehicles. Besides its commercial offerings, Mullen plans to begin manufacturing its Mullen FIVE EV crossover in late 2024 or early 2025. Mullen Automotive went public on the NASDAQ exchange through a reverse merger in late 2021.
David Michery has been the company’s CEO since he founded and incorporated the company in 2014. The existing company came from the merging of CODA Automotive and Mullen Motor Cars through acquisition. Michery is joined by Chief Financial Officer Jonathan New, Chief Commercial Officer John Schwegman and President of the Automotive Division Calin Popa.
Through a partnership with Randy Marion Automotive Group, Mullen distributes its Mullen One delivery van that has an electric range of 110 miles. Through an agreement with a Chinese manufacturer and distributor based in Ireland, the company also distributes the Mullen-GO Commercial Urban Delivery EV in Europe. In July 2023, Mullen will begin commercial production at its facility in Mississippi of its Class 3 EV Cab Chassis long-haul truck for immediate delivery. Through its 60% ownership stake in Bollinger Motors, Mullen will also reap the benefits of that company’s B1 SUV and B2 pickup truck, as well as other commercial vehicles in the future. The Mullen FIVE crossover vehicle is not slated for production until at least late 2024, but it is already taking reservations.
Mullen has been diluting its stock since going public in late 2021. This is because the company as of yet currently has little revenue from operations and no profits. The stock has fallen over 99% since the company’s reverse merger in November 2021, and the rapid dilution is mostly to blame. Taking into account Mullen’s 1-for-25 reverse stock split on May 4, 2023, Mullen had 33,338,727 shares outstanding on September 30, 2022, but 126,281,274 shares on March 31, 2023. The company is allowed to sell up to 200 million shares under current authorization.
Mullen stock forecast
The Mullen stock price shooting up nearly 70% on Wednesday was mostly just a result of the low base it was coming from. Again on Thursday the market is demonstrating that the rally has legs. The MULN share price has tacked on another 57% to trade near $0.27. This is quite close to the 21-day Simple Moving Average (SMA) at $0.275.
A close above that level in Thursday’s regular session would signal this rally will continue. Due to the extreme dilution that has taken place during the second quarter, the daily chart’s past areas of support are insignificant. If retail traders do treat them with respect though, the $0.30 level showed signs of resistance on June 15 and 16. Also in late May the region between $0.72 and $0.75 provided momentary support.
MULN daily chart