- Mullen Automotive stock is still reeling from October 19 announcement that it seeks to perform a reverse stock split in December.
- Mullen updates lawsuit against TD Ameritrade, Charles Schwab and National Finance Services.
- New York Judge says Mullen needs to file an amended complaint by November 30.
- Mullen will seek to give investors one share for between two and 100 shares of current MULN holdings.
- NASDAQ delisting saga has still not been decided as CEO Michery hopes to resolve issue by pushing MULN above $1 per share.
Mullen Automotive (MULN), the electric vehicle (EV) penny stock, held onto its recovery on Tuesday. MULN stock closed out the session up 36.7% at $0.306 per share, a little below its daily high of $0.328.
Following a mid-session lull, the Dow Jones, NASDAQ Composite and S&P 500 indices ended up closing near their intraday highs as well but all below 1%. The broad market has made gains ahead of many large-cap stocks posting earnings results after the close. These include Microsoft (MSFT) and Alphabet (GOOGL) and are likely to sway indices in the post-market.
The beloved underdog of retail investors, Mullen has been seeking to resolve issues with stock brokers it blames for manipulating its stock price, and a New York judge issued a ruling on Monday saying the company must update its complaint by the end of the month.
Mullen stock news: Judge Analisa Torres is back in the news
The United States District Court of the Southern District of New York has advised Mullen’s legal delegation that it needs to update its complaint by November 30. Mullen is suing TD Ameritrade, Charles Schwab, National Finance Services and others with the intent of exposing these brokers for manipulating the MULN stock price via allowing naked shorting and other illegal activities.
Judge Analisa Torres, who is well known for providing Ripple (XRP) with a partial victory in its case against the Securities & Exchange Commission (SEC), is presiding over Mullen’s lawsuit and has ordered both parties to jointly file their case management plan by December 15.
“We are aggressively pursuing all remedies available to us to protect the company and our shareholders,” said David Michery, CEO and chairman of Mullen Automotive, in a statement on Monday.
Mullen has retained the Warshaw Burstein and the Christian Attar law firms to represent it. In Mullen’s statement, Warshaw attorney Alan Pollack commented, “This case raises certain unique legal issues concerning how broker-dealers manipulate the marketplace and how such manipulation impacts retail investors. Counsel will diligently work to expose defendants’ wrongdoing in order to protect the rights of Mullen and its shareholders.”
Third reverse stock split of the year startles investors
Mullen’s stock price dove more than 22% last Thursday, October 19, after the company announced it will seek a third reverse stock split in December. This action may be necessary in order to raise the MULN share price above $1.
The $1 share price is required by NASDAQ to remain listed. Back in September, Mullen received notice that their stock was in danger of being delisted. Mullen executives appealed the decision, and a NASDAQ committee is still in talks about whether to permit Mullen more time to achieve the $1 threshold.
Last Thursday, Mullen announced it will hold a special shareholder meeting on December 15 to effect a reverse split between 1-for-2 to 1-for-100. This news follows reverse splits in May and August of this year that were unable to keep the stock price above $1. Shareholders have already had their nominal number of owned shares cut to one MULN share for every 225 they previously owned at the beginning of 2023. December’s reverse split will attempt to push this number up to over 1-for-1,000 shares for the full year.
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’s stock price spiked on Tuesday, rising over 35% in several instances. The large-scale rally failed to even reach the 9-day Simple Moving Average (SMA), however. After dropping below the $0.39 support level on October 16, the $0.39 threshold now becomes the primary objective of bulls to regain. Importantly, it is also nearly in line with the 21-day SMA, making that level even more significant.
Despite recent company production goals being met for its Class One and Class Three commercial vehicles, investors remain worried about continued reverse splits.
MULN daily stock chart
(This story was corrected on November 7 at 12:30 GMT to reflect that Mullen Automotive intends to issue existing shareholders one share for between two and 100 existing MULN shares as part of its reverse stock split plan, not between two and 100 shares for one existing share.)
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