Mullen Automotive Stock Forecast: MULN price trades higher amid manipulation lawsuit

Mullen is suing TD Ameritrade, Charles Schwab, National Finance Services for alleged stock manipulation.
MULN stock has lost the initial share price gain from the lawsuit announcement.
NASDAQ 100 futures have ticked slightly higher on Thursday.
Mullen is represented by Christian Attar and Warshaw Burstein law firms.

Clay Webster FXStreet

Mullen Automotive (MULN) stock rose 1% at the start of trading on Thursday, alongside the NASDAQ Composite that has risen nearly 0.5% as the market views a November interest rate hike as less and less likely. MULN shed 5.2% on Wednesday despite the announcement earlier in the week that the company was suing several of the nation’s largest brokerages for alleged stock manipulation.

The lawsuit comes on the heels of Mullen’s inability to keep its share price above $1.00 – the level required for ten consecutive sessions leading up to September 5 in order to remain listed on the NASDAQ exchange.

MULN closed Wednesday at $0.5641 per share.

Mullen stock news

On Tuesday, Mullen management announced the lawsuit brought through lawyers hired from law firms Christian Attar and Warshaw Burstein in the Southern District of New York. The EV automaker argues that TD Ameritrade, Charles Schwab, National Finance Services and others were “engaged in a scheme to manipulate the share price of [Mullen’s] securities.”

“I have been extremely frustrated by the performance of our stock and long-suspected illegal short-selling activities,” said Mullen CEO David Michery in a statement.

The “illegal short-selling activities” specified by Michery likely involve what is termed “naked short-selling”. This is when a short-seller bets against the stock price of a security like MULN without first borrowing the shares on the open market.

Earlier this summer, Mullen had already hinted that the lawsuit was in the making as Michery had announced the hiring of the Share Intel firm to research whether or not an illegal short-selling campaign was taking place.

None of the brokers commented on the ongoing lawsuit, for which Mullen is seeking compensatory damages. The news initially sent MULN stock up above $0.67 on Tuesday before selling off for a slight loss in the session.

The same day Mullen said it had so far spent $5.6 million of its $25 million board-approved buyback policy, which runs through the end of the year, in order to repurchase common stock. The company repurchased 2 million more shares since announcing the purchase of 3.7 million shares on August 17.

However, the repurchase scheme would seem to be too little, too late as the company needed to push its share price above $1.00 by August 23 in order to meet the strictures of the NASDAQ exchange for remaining listed. The exchange told Mullen management back in May that it would need to keep its share price above that level for ten consecutive trading sessions before September 5 in order to remain listed. Despite two reverse stock splits in 2023, Mullen has been unable to achieve price stability above the $1.00 level.

Mullen Automotive FAQs

What is Mullen Automotive?

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.

Who is the team behind Mullen Automotive?

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.

What vehicles does Mullen Automotive currently offer?

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.

Why does MULN stock trade for such a low share price?

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

Mullen stock has been unable to sustain any stock rally in 2023 after an extremely dilutive bout of management’s renewed share sales. Now that MULN is headed to the pink sheets or over-the-counter market, even fewer shareholders want to hang onto the stock. Expect MULN to retouch and then break through the $0.39 floor created on August 23.

MULN daily chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

AUD/USD edges higher above 0.7050 as hot CPI lifts RBA rate hike odds

The AUD/USD pair gathers strength to near 0.7055 during the Asian trading hours on Thursday. The Australian Dollar edges higher against the US Dollar as hotter inflation data bolsters expectations of Reserve Bank of Australia rate hikes. The US September Personal Consumption Expenditures inflation report will be in the spotlight later on Thursday.

USD/JPY retakes 158.00 as USD stalls the post-FOMC corrective slide

USD/JPY attracts some dip-buyers during the Asian session on Thursday, climbing back above 158.00 as the US Dollar reverses part of the post-FOMC pullback from a two-week high. Bulls, however, await key US macro data – the Advance Q3 GDP and the PCE Price Index – before positioning for further gains. Focus will then shift to the crucial BoJ policy update on Friday amid firming expectations for a December rate hike.

Gold weakens further below $4,050 amid Fed rate hike bets and Iran risks

Gold sticks to intraday losses below the $4,050 level heading into the European session ,and for now seems to have snapped a three-day winning streak to the weekly top set the previous day. The US Dollar attracts fresh buyers after Wednesday's post-FOMC corrective slide from a two-week high and is seen as a key factor weighing on the precious metal.

Pi Network risks another lower leg as the broader crypto market slips

Pi Network is trading in the red on Thursday, retreating toward a near-term support around $0.0740. The Fear and Greed Index declines to 43 on Thursday, while total liquidations exceed $350 million over the last 24 hours, suggesting a deterioration in investors' risk appetite and a sell-side bias. The technical outlook for PI is bearish, with selling pressure building.

Fed's recap: A cautious hold with a clear warning on inflation

The Federal Reserve (Fed) held its policy rate steady at 3.75%-4.00%, but it wasn’t a unanimous decision. Among two officials who wanted a 25-basis-point hike were Lisa Cook and Beth Hammack, while Chair Kevin Warsh said the Fed would use the coming flow of information to decide whether further action is needed. The statement presented a resilient economy.

Anthropic pledged $270 billion to Amazon, Google, and Microsoft. Here's who actually gets paid

Anthropic owes Amazon, Google, and Microsoft at least $269.4 billion for computing power, even if it uses less. All three sell its models and handle its billing, and Amazon and Google own stakes and lend it money, so they get paid regardless of how the IPO goes. The Dario Amodei-led Anthropic filed its initial public offering (IPO) on Monday, seeking a listing on the Nasdaq under the ticker ANT.