Mullen Stock News: MULN closes 5% higher on Tuesday

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• MULN stock has fallen 19% since receiving notice that NASDAQ exchange would continue to honor its listing.
• Mullen Automotive had been in violation of a rule requiring its share price to remain above $1. 
• NASDAQ has given Mullen until January 22, 2024, to keep its share price above $1 for 20 consecutive trading sessions.
• Mullen CEO David Michery will hold a shareholder meeting on December 15 to vote on a reverse split with a ratio between 1-for-2 to 1-for-100.

Mullen Automotive (MULN) stock closed up 5.2% on Tuesday, ending the session at $0.2672. Mullen stock gave up an early double-digit lead as traders took profits. MULN stock’s higher open was a relief for shareholders, who were dealt a 9.3% decline to start the week on Monday.

Mullen stock was unable to hold onto its initial rally following last Thursday’s announcement that the NASDAQ exchange will give the company further time to push its stock price above the necessary $1 threshold. Friday and Monday’s sell-off may be over, however, as Mullen stock rallied as high as $0.34 on Tuesday.

The US market advanced Tuesday afternoon. The NASDAQ Composite, Dow Jones and S&P 500 have all moved from morning losses to afternoon recoveries.

Mullen stock news

On Thursday, Mullen announced two requirements that the NASDAQ Hearings Panel provided in order to retain its listing on the well-known exchange:

“1. on or before Jan. 22, 2024, the Company must demonstrate compliance with Listing Rule 5550(a)(2), by maintaining a closing bid price of $1 per share for 20 consecutive trading sessions; and

2. on or before March 8, 2024, the Company must demonstrate compliance with Listing Rule 5620(a) by holding an annual shareholder meeting.”

CEO David Michery has already announced a meeting to vote on the reverse split set for December 15. Much of the downward pressure on Mullen Automotive has come from the knowledge that the electric vehicle (EV) manufacturer will need to effect a serious reverse split in order to drive the share price above $1.

“I am pleased NASDAQ gave the Company this opportunity to continue implementing its business plan. We are diligently working to regain and maintain compliance with Nasdaq’s continued listing requirements,” Michery said in a statement.

Management already failed a similar policy in late August when it effected a 1-for-9 reverse split that was not enough to keep the share price above the threshold. MULN shares fell to $0.60 in the leadup to the September 5 date given by NASDAQ to retain its share price. 

This time around, shareholders are expecting management to realize a much larger reverse split to make sure there is no chance the share price will fall below the $1 level before January 22. Management should still have the majority of its $25 million buyback program available to drive the share price higher. As of September 27, management said it had only spent $5,610,600 of the funds available for share buybacks and has not updated this figure since.