All eyes are on Mullen Automotive (NASDAQ:MULN) stock, as today, Sept. 5, is the last day for the electric vehicle (EV) company to regain compliance with Nasdaq’s continued listing policies. In order to regain compliance, MULN stock must close at or above $1 for at least 10 consecutive business days, but generally no more than 20 consecutive business days.
Back in May, MULN stock closed at or above $1 for 10 consecutive business days following a 1-for-25 reverse stock split. Later on, Mullen initiated a 1-for-9 reverse split, resulting in a cumulative reverse split ratio of 1-for-225. However, the company remains on Nasdaq’s Noncompliant Companies list to this day. As a result, we can assume that Nasdaq requires MULN to close at or above $1 for more than 10 consecutive business days.
Today is Sept. 5, which means that MULN did not regain compliance by the deadline.
MULN Stock Fails to Close Above $1
So, what happens now? In March, Nasdaq stated the following:
“If compliance cannot be demonstrated by September 5, 2023, Staff will provide written notification that the Company’s securities will be delisted. At that time, the Company may appeal Staff’s determination to a Hearings Panel.”
An appeal to Nasdaq’s determination seems to be Mullen’s best choice. Shareholders should expect the company to do exactly that. While Nasdaq’s hearing panel decides on the outcome, MULN stock should remain listed on the exchange.
Technically, Mullen could also try to initiate another reverse split. However, any company that effects a reverse split with “a cumulative ratio of 250 shares or more to one” over the past two years is not eligible for a compliance period “and the Listing Qualifications Department shall issue a Staff Delisting Determination under Rule 5810 with respect to that security.”
Mullen has also initiated a $25 million buyback program to boost its share price, which expires on Dec. 31. As of Aug. 29, the company had bought back $5.61 million worth of shares.
“As I have stated on many prior occasions, I believe that our stock is undervalued,” said CEO David Michery. “The Company has a strong balance sheet and we continue to execute on our business plan, including our recent Class 3 production start with the first vehicles rolling off the line.”
Based on Mullen’s stock price, shareholders haven’t given much weight to Michery’s comments.
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On the date of publication, Eddie Pan did not hold (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.
