Thrill seekers, listen up! Electric vehicle (EV) manufacturer Mullen Automotive (NASDAQ:MULN) has major news for current and prospective investors. MULN stock isn’t right for everyone, but Mullen Automotive’s achievement of an operational milestone might persuade you to take a share position.
Not long ago, I stuck up for Mullen Automotive even while the automaker’s shares lost value. My stance is certainly subject to change, but for now, I still like Mullen Automotive’s future prospects. Just be sure to learn all of the relevant facts surrounding Mullen — the good, the bad and the downright ugly — before putting your investable capital on the line.
Did MULN Stock Just Go to the Moon?
On Aug. 11, MULN stock was suddenly trading at $1; the prior day, it was only priced at 11 cents. So, was there an epic short squeeze? Or, did Mullen Automotive release some game-changing news on that day?
The answer is: none of the above. In actuality, Aug. 11 was the day Mullen Automotive effected a 1-for-9 reverse stock split. Apparently, this is Mullen’s quick fix to avoid delisting from the Nasdaq exchange.
Mullen Automotive basically admitted this, explaining that the reverse stock split is “primarily intended to bring the Company into compliance with the $1.00 minimum bid price requirement for maintaining its listing on Nasdaq.” The goal of getting MULN stock to $1 was achieved on Aug. 11, bust just barely.
Thus, there was no share-price moonshot. It was just Mullen Automotive’s way to avert delisting for now, and this really isn’t the biggest news item to consider.
Mullen Automotive’s Big Operational Announcement
More importantly, as InvestorPlace Financial News Writer Eddie Pan reported, Mullen Automotive disclosed that it would “begin repurchasing MULN as part of its $25 million buyback program.” Now, this is news that Mullen’s investors should celebrate.
After all, if Mullen Automotive is reducing its supply of available shares through buybacks, this could make each share more valuable. This is encouraging — but hold on, as there’s even bigger news than the buyback announcement.
Specifically, Mullen Automotive has finally started producing its Class 3 electric truck model, known as the Mullen THREE. Furthermore, the first customer deliveries of the Mullen THREE are reportedly “on track to begin in August and September.”
It was already Aug. 10 when this announcement was made, so we might see Mullen THREE units on the roadways very soon. Moreover, the company already has $79 million worth of purchase orders for the Mullen THREE trucks. So, Mullen is fully justified in ramping up its production of this electric truck model.
MULN Stock Is Still Worth a Look
I’ll admit, it’s only a temporary fix for Mullen Automotive to implement a reverse share split. On the other hand, it’s encouraging to learn that Mullen plans to buy back its own shares.
In addition, having $79 million worth of purchase orders for the Mullen THREE really puts Mullen Automotive in the driver’s seat. Therefore, I’m still bullish about MULN stock, but with a word of warning: always maintain a small position size, and be ready for volatility if you’re investing in Mullen Automotive.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
