Mullen Automotive, a player in the electric vehicle (EV) market, has made headlines recently, with its stock (NASDAQ: MULN) experiencing significant fluctuations.
This piece provides an in-depth analysis of MULN’s stock performance, financial health, and prospects.
MULN’s Historical Performance
MULN stock price has faced a downward trend in recent years, with shares hitting an all-time low of $0.87 in 2023.
The stock’s performance was notably weaker than other EV players such as Tesla and Nio in the same period, with MULN’s shares down by over 99% from their year-to-date high.
Financial Challenges Faced by MULN
Mullen Automotive has been grappling with severe financial difficulties. The company’s survival is contingent on its ability to secure additional capital in the upcoming months.
Following the release of its second-quarter financial results, MULN stock plummeted by over 50%. The company’s mounting fiscal losses each quarter have been a major concern for investors.
About MULN: A Better Alternative to Tesla?
The car industry is undergoing swift transformations, particularly in the direction of electric mobility. In 2022, electric vehicles accounted for 10% of all new car sales in the US. Mullen Automotive aspires to present itself as a more compelling choice compared to seasoned EV giants such as Tesla.
Mullen is actively crafting its vehicles in California and channeling resources into solid-state battery research. Should this endeavor prove fruitful, it could pave the way for the creation of enhanced battery systems. Additionally, Mullen manages CarHub, a marketplace for automotive transactions.
In 2022, MULN made strategic acquisitions, including Electric Last Mile Solutions (ELMS), for $240 million and a 60.5% stake in Bollinger Motors, a company that manufactures electric trucks.
MULN stock’s Current Performance
As of September 19th, at 6:52 am GMT-4, MULN stock is presently trading at $0.60 USD, showing a decrease of $0.076 (11.16%) for the day.
During the pre-market session, the stock experienced a minor increase, reaching $0.62 USD, representing a rise of $0.012 (1.99%).
MULN currently holds a market capitalization of $111.26 million, with the P/E ratio and dividend yield data currently unavailable.
MULN has recently acquired battery assets from Romeo Power for $3.5 million. This news resulted in a 5.77% surge in MULN’s stock price. However, the company reported an $11.14 net loss per share for the three quarters ending in June 2023, a significant increase from the previous year’s figure of $4.26 per share.
Despite the announcement of its first revenue of $308,000 from the sale of 22 EV Vargo Vans, MULN’s stock remained in a downward spiral. The company managed to raise $110 million in additional funding by selling its convertible preferred stocks, warrants, and promissory notes.
MULN’s Reverse Stock Split
In August 2023, MULN US stocks implemented a reverse stock split to meet NASDAQ’s minimum bid requirements. The 1-for-9 stock split saw the shares hover around the key psychological level of $1.
Reasons for MULN’s Stock Crash
MULN shares, similar to stocks of companies like Virgin Galactic, SoFi, OpenDoor, and Clover Health, have plummeted following their public debut via a Special Purpose Acquisition Company (SPAC) merger. The SPAC bubble burst in 2021, leading to a downward spiral of these stocks.
MULN’s stock price took a further hit after Hindenburg Research, a renowned short seller, published a negative report on the company, accusing it of fraud and rebadging Chinese vehicles to sell as its own.
Analysts have also expressed concerns about MULN’s rapidly depleting cash reserves, which could lead to bankruptcy.
Is MULN a Good Investment?
Investing in MULN US stock presents significant challenges. The company is yet to demonstrate a proven technology and is burning through cash reserves at an alarming rate.
MULN’s history is checkered, with the company shifting its focus from building an electric saloon to introducing China’s Qiantu K50 to the US, then to delivery trucks and other vehicles.
Moreover, establishing an EV company requires massive capital due to factors like recalls. MULN will likely need to raise billions of dollars in the coming years, possibly leading to shareholder dilution.
MULN Stock Buyback
During the financial announcements for the second quarter, MULN greenlit a share repurchase initiative, permitting the firm to acquire stocks valued at a maximum of $25 million by 2023’s conclusion. Nonetheless, this initiative isn’t mandatory and might conclude ahead of its stipulated end date.
MULN Stock Forecast
At this juncture, MULN’s stock is navigating its most profound trough since its inception. The landscape lacks any evident markers of an imminent rebound, and the shadows of bankruptcy loom large. This paints a rather somber picture for MULN’s trajectory in the near horizon.
For those keen on the numbers, here’s a breakdown:
- The stock touched its 52-week nadir at 0.0355.
- For traders mapping out their strategies, consider the following levels:
- The uppermost resistance, termed R3, stands at 0.6079.
- The mid-tier resistance levels, R2 and R1, are pegged at 0.579 and 0.564 respectively.
- The pivot point, a key reference, is at 0.536.
Though MULN’s latest endeavors and acquisitions signal attempts at rejuvenating the firm, the financial hurdles combined with an absence of established technology cast a shadow over the company’s prospective trajectory.
Prospective investors should exercise caution and carefully analyze the company’s financial health and market trends before making a decision.