- NASDAQ:MULN gained 10.69% during Monday’s trading session.
- Retail investors believe Mullen is the next big thing in the EV sector.
- Mullen still lacks the technology to take on industry heavyweights.
Update: One step forward, one step back. That is how it is going for Mullen Automotive stock (MULN) on Tuesday. Following Monday's 10.7% climb, MULN shares are down 9.9% to $2.89 in the late morning trade. Though Monday saw a major gain at the close, Mullen's stock price has been dropping since Monday afternoon. In the morning shares rocketed up as high as $4.18 on Monday, but at around 12:15 PM EST they began selling off in a serious fashion. Shares are continuing down on the same trajectory on Tuesday and are about 30% off that high at present.
NASDAQ:MULN is the talk of the town right now as the stock extended its recent hot streak and was up by as much as 35% during intraday trading. On Monday, shares of MULN gained a further 10.69% and closed the first trading day of the week at $3.21. The stock is now up a staggering 94.5% over the past week and over 426% during the past month. Mullen Automotive outperformed the NASDAQ index which dipped by 0.40% after a bullish close to last week. The stock rose alongside EV industry leader Tesla (NASDAQ:TSLA), which has jumped higher over the past week due to the imminent opening of the Berlin GigaFactory.
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If the price action of Mullen’s stock as of late seems familiar, it is because MULN remains one of the hottest ticker symbols on Reddit. Retail and social media investors have jumped onto the Mullen bandwagon, and some comments in discussion boards have labelled it as the next ‘Tesla Killer’. Investors should be cautious over this type of sentiment. Remember what happened when Lucid (NASDAQ:LCID) was referred to in the same manner and neither the stock nor the company have lived up to these expectations.
MULN stock forecast
Despite all of the bullish sentiment around Mullen, the underlying fundamentals for the company should temper some expectations. First, the company won’t have an EV out until 2024 at the earliest, which gives other automakers with deeper pockets two years on Mullen. The solid-state battery technology is promising, although we should reserve judgment, especially after what happened with QuantumScape (NASDAQ:QS). Finally, its driver-assist system or ADAS is going to be level 2.5 in 2024 when the FIVE crossover launches. Tesla is already at level 3, and expects to be at level 5 by 2030.
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