Shares of the emerging EV (Electric Vehicle) maker Mullen Automotive (NASDAQ:MULN) dropped over 42% in one month. But before you jump to invest in this penny stock, understand that the company is still in the product development phase, implying that its stock could remain highly volatile in the coming months.
While investors dumped Mullen, BlackRock (NYSE:BLK) continued to show confidence in the stock. After substantially increasing its holdings in MULN stock in Q3, BlackRock again increased its stake by 1% in Q4.
Besides for BlackRock’s growing stake in the company, the recent $200 million purchase order from Randy Marion Isuzu and exclusive sales and distribution rights for Mullen’s I-GO in select European markets are some of the positives supporting the bull case for MULN stock.
However, the company is still in the early stages, which makes it a speculative bet and highly risky. It’s worth highlighting here that the company plans to start the retail production of its Mullen FIVE, its electric crossover, in Q4 of 2024.
Meanwhile, concerns over equity dilution, access to capital, and competitive headwinds pose challenges.
Is MULN a Buy or Sell?
The secular sector trends and the planned start of production of the first electric crossover could support Mullen’s stock. However, the stock has a Smart Score of one on TipRanks, implying it is more likely to underperform the broader markets.
Meanwhile, investors planning to take a speculative bet on emerging companies can use TipRanks’ Penny Stocks Screener to find attractive investments for the long term.
