There’s bad news ahead for Mullen Automotive (NASDAQ:MULN), and a recent letter from the company made it clear how bad things were. Investors, in turn, made it clear they weren’t standing for it and bugged out en masse, taking over 20% of the stock’s value along with them.
David Michery, Mullen’s CEO, spelled it out frankly: the only real chance that Mullen Automotive had to stay listed on the Nasdaq exchange was a reverse stock split. And a substantial one, too; with share prices down around $0.09 per share, it would take roughly a one-for-12 reverse stock split to get shares back over $1 per share and allow the company to remain listed on the Nasdaq exchange. But even if the plan should go through, that may not be enough. The letter to shareholders also revealed that Mullen needed to raise new capital in order to get back on track and get its cash flow back up into the green.
Disaster Temporarily Averted
The good news for Mullen shareholders is that, indeed, the plan to stage a reverse stock split did pass. While the exact amount of the split is unknown, a split between one-for-two and one-for-100 has been authorized. The bad news, however, is that it took more than one vote to get there. The first vote, on December 15, was subsequently adjourned after failing to get enough votes to pass. The new vote was rescheduled for today, and this time, it passed. And just to add insult to injury, this will be the third reverse stock split Mullen has engaged in during 2023; the first was one-for-nine, and the second was one-for-25, which basically gives you a ratio of one-for-225.
Is MULN a Good Stock to Buy?
Turning to Wall Street, a look at the last five days of trading in MULN stock shows that, for a while, it held to a reasonably even keel. At least, it did until the latest news came out, and it was mostly downhill from there. In the late morning, it got a bit of a rally but nowhere near enough to recover, and after the rally, it continued on a downward track. Meanwhile, a look at the last year nearly wipes out Mullen Automotive altogether, as it’s down 99.82% over the past 12 months.
