Mullen Automotive Stock Forecast: MULN overtakes 21-day moving average in sign of life


  • Mullen stock closes above 21-day SMA on Thursday.
  • MULN stock added 7.6% on Thursday as the broad market rose.
  • US Retail Sales in January fell more than expected.
  • LaFontaine Automotive Group will sell Bollinger B4 cab at two Michigan locations.

 

Mullen Automotive (MULN) stock advanced 7.6% on Thursday as the electric vehicle (EV) company transcended the 21-day Simple Moving Average (SMA) for the first time in more than a month. MULN stock closed at $7.61 per share.

The broader market advanced as well on Thursday, making gains for the small automaker more possible. The S&P 500 closed up 0.58% on Thursday, while the Dow Jones added 0.91%. US Retail Sales for January arrived at -0.8% MoM, which was well below the forecast for -0.1%. This made the market hope that interest rate cuts might arrive sooner than later from the Federal Reserve.

EV leader Tesla (TSLA) added more than 6% after a Morgan Stanley analyst predicted that Elon Musk’s company will hit $380 a share within 12 months.

Mullen Automotive stock news

Mullen just announced on Wednesday that it had committed to a new partnership with the LaFontaine Automotive Group as its first authorized dealer for the Bollinger Motors B4 Chassis Cab. Mullen purchased Bollinger Motors in 2022, and the Michigan-based company’s B4 is an electric commercial delivery vehicle similar to a box truck. 

The LaFontaine Automotive Group plans on selling the B4 at two locations in Lansing and Farmington Hills, Michigan, when the vehicle reaches full production in the second half of 2024. The B4 qualifies for clean energy tax credits of as much as $40,000 per vehicle stemming from the Biden administration’s Inflation Reduction Act.

“Our team has positioned itself as a true commercial and fleet powerhouse,” said Brian Frania, commercial and fleet director at LaFontaine. “We have seen tremendous growth in both commercial units sold and serviced.”

Earlier in the week, Mullen released quarterly results for the period ending in December. After delivering 231 commercial vehicles in the quarter, Mullen cut its quarterly loss attributable to common shareholders to $61 million from a loss of $377 million a year ago. Shareholder equity dropped just $1 million YoY to $272 million.

Total cash on hand fell from $156 million at the end of last September’s quarter to $89 million at the end of December. The company expects to close on a $32 million loan for vehicle production this month.

 

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

The range lows on December 21 and January 24 at $6.95 and $6.36, respectively, appear to be acting like support for MULN stock price action in February. After convulsing in wild spasms in the weeks following the reverse stock split in late December, Mullen stock remained relatively stable for once in February. 

CEO David Michery reiterated his promise not to further dilute shareholders, using debt instead of equity to fund the company’s production campaign. MULN stock has settled in a pattern, rising and falling between $6.70 and $7.70. 

With the break above the 21-day SMA on Thursday, Mullen stock looks better positioned for a rally. The Moving Average Convergence Divergence (MACD) indicator has been in a bullish upswing since early February. A close above $8.00 is all that is needed now to persuade buyers to enter the fray.

MULN daily stock chart

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