Mullen Automotive Stock Forecast: MULN stock declines as broader equity market tips lower
- MULN stock is trading lower on Tuesday.
- The equity market is focused on a possible US government shutdown, Dimon’s dreaded 7% fed funds rate.
- Mullen stock has entered its first uptrend in two months.
- EPA has certified Mullen THREE electric semi truck.
Mullen Automotive (MULN), the micro-cap electric vehicle manufacturer out of Brea, California, has witnessed its stock enter a bullish uptrend for the first time since July 20. Several news items have combined to lead the MULN share price higher since September 11.
On Tuesday, however, the stock has begun the session down 3.6% just under $0.54. The broad equity market is shedding weight after JPMorgan’s CEO, Jamie Dimon, said the Fed could still boost interest rates to 7% and House Republicans are still refusing to pass a budget bill that could force the US federal government to shut down certain functions starting next week.
Mullen stock news: EPA certifies Class 3 truck
Following Mullen CEO David Michery’s failure to sustain the Mullen stock price above $1 in the period before September 5, NASDAQ issued its intent to delist MULN stock from its exchange. Despite Mullen’s management team attempting to appeal the decision, Mullen’s stock price sank 60%.
Since that defeat, however, Mullen’s management team has been firing on all cylinders. The latest announcement came on Monday with the US Environmental Protection Agency (EPA) certifying Mullen’s Class 3 electric semi truck cab called the Mullen THREE. With this certification in hand, as well as the Mullen THREE completing all compliance requirements for the Federal Motor Vehicle Safety Standards license, the vehicle can now be delivered to customers.
For months, Mullen has had a $63 million back order from commercial dealer Randy Marion Automotive for 1,000 Mullen THREE models. MGT Lease Company also has an order for 250 Mullen THREE units, valued at $15.7 million. A third smaller order comes from NRTC Automation Group.
That positive announcement follows last week’s announcement that the New York Power Authority had decided to purchase a set of Mullen CAMPUS vehicles after a 60-day tryout period at a hydroelectric dam in upstate New York. The Power Authority also said it is discussing whether to purchase additional vehicles for plant operations, such as Mullen’s Class 1 EV cargo vans and Class 3 EV cab chassis trucks.
Additionally, Mullen recently received notice that both the Mullen ONE and Mullen THREE are eligible for $7,500 federal tax credits in the US, which makes them even more competitive than before.
“Total cost of ownership is critically important to commercial customers” said John Schwegman, chief commercial officer of Mullen Automotive. “Tax credits such as these, along with lower fuel and maintenance costs, show a clear advantage for Mullen’s commercial offerings compared to traditional internal combustion vehicles.”
Penny stocks FAQs
Originally, penny stocks were any stock that traded for less than $1, i.e. pennies. The Securities & Exchange Commission has since altered the definition to include any stock that trades for less than $5. Penny stocks are typically associated with small companies that have either experienced poor results, sending their share price down, or with companies who dilute their share price by issuing lots of shares over time in order to fund operations or acquisitions.
Some penny stocks trade on respected exchanges, such as the NASDAQ or the NYSE. Examples of these are Mullen Automotive (MULN) and Bark (BARK). Those exchanges have requirements though. For the NYSE, listed stocks must have 1.1 million publicly traded shares outstanding with a market value of at least $40 million. The NASDAQ requires a share price minimum of $4, a minimum of 1.25 million shares and a market cap of $45 million. Most penny stocks, however, trade on the OTC (over-the-counter) market. This may mean the OTC Bulletin Board or the privately-owned OTC Markets Group.
Quite often the sharpest movers on any normal trading day are found among penny stocks. This is because non-penny stocks tend to have more liquidity, and the market is more certain about larger companies’ long-term values. Penny stocks are illiquid, meaning there is little supply available if an announcement drives more buying demand into a particular stock. There are no market makers that hold large amounts of penny stocks just to dispense them at a slightly higher price point. Additionally, most of these penny stocks suffer from a news desert where few market players know anything relevant about them. This is why a small biopharma company can issue news about a successful drug trial and immediately rocket 500% higher, with no analysts on Wall Street covering it.
Typically, the answer is “No”. Penny stocks are more risky than higher-priced stocks on average. Penny stock investors have a higher chance of losing their capital by investing in weaker companies. There is a reason why they are penny stocks in the first place, which is that largely the mainstream market is not interested in investing in them. Two groups of investors tend to focus on penny stocks, however. The first group are day traders, who know that the lack of liquidity in penny stocks could lead to extremely large swings over a short time period. The other group is made up of investors who like the fact that these stocks are disregarded. This allows these investors to gain an advantage by benefiting from upcoming announcements, because the larger market is not paying attention.
Mullen stock forecast
Mullen stock saw the 9-day Simple Moving Average surpass the 21-day SMA last Friday for the first time since July 20. With MULN pulling back at the start of Tuesday trading, this positive sign may not last long. However, it is still a good sign that investors are reengaging with the stock despite the NASDAQ snafu.
Bulls have three primary goals in mind. The first is conquering the 9-day SMA near $0.57. Then the $0.75 high from September 18, followed by the longer-term support-turned-resistance level of $0.90. Support remains at $0.39.
MULN daily chart