Back in May, Mullen Automotive, Inc. (NASDAQ: MULN) effected a 1 for 25 reverse split to regain compliance with the NASDAQ minimum price requirement. Fast forward 3 months, the emerging EV maker finds itself in a similar position with the stock trading at around $.12 per share. For this reason, investors are anticipating the results of the company’s latest shareholders’ meeting where they voted on several proposals, chief among them is the proposal to effect another reverse split to maintain the company’s NASDAQ listing. Although reverse splits are normally negative catalysts for any stock, this may not be the case with MULN since its NASDAQ listing is pivotal for the company to achieve its long-term plans. In light of this, MULN stock may soar on the anticipated results of the shareholders’ meeting.
MULN Stock News
Securing Two Delivery Orders
After completing its first patch of vans delivery to the growing vehicles sales and leasing company MGT in late March, MULN announced that it had signed a vehicle purchase agreement with MGT for 250 Class 3 cab chassis EV trucks. The purchase agreement is valued at $15.75 million, which is around $63,000 per vehicle, and is expected to begin in August and be completed in December. Adding to its purchase orders, MULN also announced a 1000 vehicle purchase order valued at $63 million for Class 3 EV trucks from Randy Marion Automotive Group earlier this month, which will start in August and be completed in Q1 2024. With this in mind, MULN could realize significant revenues during the upcoming quarters.
Expectations for Future Earnings
MULN is estimated to have its Q2 2023 earnings on May 22nd, however, investors might have to lower their expectations as the company is set to report its first revenues during Q3 2023. With MULN delivering 19 cargo vans as of May 4th and expecting to deliver 20 more during the month at $34,500 per vehicle, MULN revenues could be around $1.3 million as of May 2023. If the company does deliver another 20 vehicles during June, MULN’s total revenues for Q3 2023 could be around $2 million resulting in an EPS of approximately -0.49. In Q4 and Q1 2024’s case, if MULN completes around 25% of its contracts in Q4 and the other 75% in Q1, MULN could be reporting revenues of around $19.6 million in Q4 with an EPS of approximately -0.37 while reporting revenues of around $59 million in Q1 2024 with an EPS of approximately -0.11. Based on these figures, MULN could be slowly building towards its path to profitability, which could potentially make the stock an exceptional long-term investment at the current PPS.
Blackrock Raising Its Stake in MULN
In other news, the investment giant BlackRock, Inc. (NYSE: BLK) revealed that it now owns 73.7 million shares of MULN, which is a whopping %178.96 increase compared to the company’s previous 13F-HR in February, where it disclosed its ownership of 26.4 million shares. As a result, BlackRock now owns around 48% of MULN’s shares which could be a bullish sign for the stock.
*Updated May 26th, 2023
Major Announcement
Fortune seems to be favoring MULN as Lawrence Harge recently stated that there will be a major announcement regarding MULN between Friday and Tuesday. That revelation came after he dropped a couple of MULN bombshells. The first one was the revelation that MULN would receive half of the capital made from the Saudi deal, and the second bombshell was that there are more Middle East deals in the works. That said, the announcement could be related to these bombshells.
While not much is known regarding the major announcement, it could be an official announcement regarding the Saudi deal. Moreover, it could be related to the additional Middle Eastern deals Hardge announced. Since all potential outcomes of the major announcement would add value to the company, MULN stock could be well-positioned to climb and retest the $1 mark.
If the Saudi deal goes through MULN should receive a whopping $5 billion which dwarfs its market cap of $162 million. Through these funds, MULN would be able to advance its technology, accelerate the development of its flagship vehicle – the Five, or expand its manufacturing capabilities.
*Updated June 21st 2023
The Bottom Is Here?
As things stand, MULN stock is trading near its all-time low of $0.1550, however, the stock could be extremely undervalued at current levels. Although dilution is proving to be a major risk associated with MULN, the stock is trading below its cash level as the company has a cash position of $135 million or $.38 per share.
This means that MULN has an upside of 140% from current levels to trade at its cash level. In this way, MULN could be extremely undervalued and the stock could see a rebound soon to reflect the company’s true value. Despite the risks, MULN stock could be extremely attractive at current levels since it could have found its bottom.
Class 3 Production
With this in mind, MULN has a major upcoming catalyst that could help the stock run. Thanks to its partnership with NRTC, MULN is set to commence production of its class 3 vehicle at its Tunica, Mississippi facility, and deliveries are expected to begin by next September. Considering that the company has $279 million in purchase orders for its class 1 and 3 vehicles, beginning production could see MULN stock soar as it would be on the right track to start realizing revenues from its class 3 vehicles.
*Updated July 6th, 2023
Combatting Naked Short Selling
With evidence of illegal naked short selling happening to the stock, MULN retained Christian Attar to lead its investigation into the naked short selling activity the stock has been witnessing. This move was received well by investors as the stock climbed 81% on the news and continues to garner investors’ attention.
The reason behind this bullish sentiment could be due to Christian Attar’s reputation in regard to market manipulation cases. Previously, Christian Attar investigated and won or settled cases of market manipulation for millions. In this way, MULN may end up realizing a hefty sum from this investigation resulting in a substantial cash reward that could assist the company in its manufacturing endeavors.
At the same time, MULN’s actions to combat naked short selling resemble those of Genius Group Limited (NYSE American: GNS) which ran 1400% after sharing its intention to combat naked short selling. With this in mind, a common factor is present in both cases. Christian Attar – previously Christian Levine Law Group – was involved with GNS’ investigation. Moreover, both companies involved high-profile players in their investigations – with GNS involving former FBI Deputy Director Timothy Murphy and MULN involving ShareIntel.
By adding key players such as ShareIntel and Christian Attar, MULN appears to be aggressively combatting naked short selling which could be a main reason for the stock’s poor performance recently despite the company’s positive announcements.
Share Buyback Program
On that note, MULN is looking to capitalize on the stock’s low PPS by announcing a $25 million share buyback program that is authorized through December 31st, 2023. In this way, MULN is adding value to its shareholders as this program would significantly reduce the company’s float of 190.1 million shares. With the company announcing the buyback program right after retaining Christian Attar to combat naked short selling, MULN stock could be poised to continue running over the coming weeks.
*Updated August 7th, 2023
Shareholders’ Vote Results
MULN’s proposed reverse split will be in a range between 1 for 2 and 1 for 100. If this proposal is approved, the ensuing reverse split could drastically decrease the stock’s float and help it veer away from delisting. In the worst case, scenario the stock gets delisted and becomes an OTC stock. The results of delisting would give the company’s long-term plans a huge blow since it will not have the same access to capital it currently has thanks to its NASDAQ listing. This is mainly due to institutions’ skepticism of OTC companies, unlike companies that are listed on a national exchange since they usually have more legitimacy.
Another reason why the reverse split is beneficial for MULN’s shareholders is the low trading volume on OTC stocks compared to the NASDAQ listed counterparts. This means that if MULN stock gets delisted, its share price may further plummet which would be negative for shareholders. For these reasons, it is very likely the proposal to effect a second reverse split gets approved by the company’s shareholders to maintain its NASDAQ listing.
In addition to voting on effecting a second reverse split in 3 months, shareholders also voted on a proposal to move MULN’s state of incorporation from Delaware to Maryland. The reasoning behind this proposal is that the company paid $130 thousand in franchising tax last year and expects to pay $150 thousand this year which it will not have to pay if it moved its state of incorporation to Maryland.
However, this proposal is unlikely to be approved by shareholders since while it appears to be for cost savings, there are major negative impacts it could have on shareholders. These negatives are related to the company being able to raise its authorized shares and effect reverse splits without shareholders’ approval. While that would allow the company to act in a more versatile way regarding stock-related decisions, it could dampen investors’ confidence in the company which could see the stock fall drastically if the proposal is approved.
MULN Stock Financials
According to MULN’s Q1 report its assets increased QoQ from $302 million to $402 million and its cash on hand increased from $54 million to $60.3 million. That said, MULN also has $26.7 million in restricted cash hence the $86.7 million balance. On the other hand, MULN’s liabilities decreased QoQ from $145.6 million to $139 million.
In terms of expenses, MULN experienced a sharp increase YoY from $30.45 million to $67.89 million. Despite this, MULN’s net loss decreased from $324.6 million to $116.9 million
Media Sentiment
@chacha72kobe4er is bullish on MULN’s deliveries in Ireland.
@FinJourney is claiming that the reverse split proposal passed.
Technical Analysis
MULN stock is in a neutral trend and is trading in a sideways channel between $.1167 and $.1552. Looking at the indicators the stock is below the 200, 50, and 21 MAs which is a bearish indication. Meanwhile, the RSI is neutral at 43 and the MACD is bearish.
As for the fundamentals, the anticipated results of the shareholders’ vote on the reverse split proposal is a catalyst for MULN stock since it may be the company’s saving grace. Given that delisting would negatively impact the company’s long-term plans, it is very likely for the proposal to pass. As the results of the vote may be released soon, MULN stock may be poised to run ahead of the results.
MULN Stock Forecast
Currently, MULN stock is at a pivotal point. If its shareholders approve its proposed reverse split, the stock will likely surge since this move will help it avoid delisting. Additionally, if shareholders vote to deny the company’s proposal to move its state of incorporation to Maryland, the company may avoid an investor relations nightmare which means that this decision could act as another catalyst for the stock. Keeping that in mind going long in anticipation of MULN’s stockholders’ meeting results could prove to be a profitable decision.
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