Mullen Automotive Stock News: MULN plunges 28% following 68% rally
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- Mullen failed to keep its share price above $1 for ten consecutive sessions.
- NASDAQ will delist MULN stock on or soon after September 5.
- Management handed its officers and CEO stock-based compensation on August 21.
- MULN stock rallied 68% on Wednesday following CEO shareholder letter.
Mullen Automotive (MULN) stock slid 28% at the opening bell on Thursday. The stock is trading near $0.58 a day after MULN shares rallied hard after the chief executive released a shareholder letter.
Mullen stock is destined for the pink sheets. The stock needed to achieve a close above $1.00 by the close of the regular session on Tuesday, August 22, and hold that threshold every session through September 5 (ten consecutive trading sessions) in order to retain its NASDAQ listing. Instead, MULN stock closed at $0.48 on Tuesday, and now shareholders can look forward to trading in the less liquid OTC market sometime after September 5.
MULN stock shot up more than 68% on Wednesday after CEO David Michery released a statement about Mullen’s stock price struggles, but shareholders were already out of time. Mullen is again failing to benefit from Thursday’s equity market excitement following Nvidia’s (NVDA) record-breaking quarter. NASDAQ futures have gained 1.3% at the time of writing, while Mullen stock is trading more than 5% lower.
Mullen stock news: Shareholder letter rallies the troops too late
CEO David Michery attempted to assuage the feelings of shareholders on Wednesday with his public letter.
“I am very disappointed by the performance of our stock,” Michery wrote. “As I have previously publicly stated, I do not believe the trading price of our stock even closely resembles the Company’s actual value. It is evident that, regardless of meeting significant corporate milestones (i.e., vehicle production completion within projected timelines), stock traders continue to place downward pressure on the stock, causing the price to fall.”
An interesting missing detail in the statement was that Michery did not disclose whether he had attempted to use the board’s entire $25 million allotted for buybacks in order to revive the share price. Beginning on August 16, the company repurchased 3.7 million shares of MULN stock for $3,626,000.
Of course, it did not help the situation when the company filed documents with the Securities & Exchange Commission (SEC) on Monday to register 52 million new shares of common stock based on a 2022 equity incentive program. Additionally, the company awarded Michery with 14 million new shares based on a 2022 performance stock award agreement and 16 million shares for a 2023 performance agreement.
Taken together, these incentive and performance awards should dilute existing shareholders by approximately 34%. So it’s not surprising that Mullen’s stock price is down roughly 20% since a week ago. Mullen management has mistreated shareholders for years due to near-constant dilution, so it’s unsurprising that shareholders were not there for them when they needed to hold onto their NASDAQ listing.
Mullen stock forecast
Don’t expect MULN stock to magically regain shareholder confidence as it gears up for its demotion to the pink sheets. Just look with awe at the value destruction from the monthly chart below. If you had purchased $1 million worth of MULN stock at its August 2020 high – only three years ago – it would now be worth $177.07.
MULN monthly chart
