Shares of Mullen Automotive (NASDAQ:MULN) stock are surging higher by over 30% this morning. The electric vehicle (EV) company has quickly picked up popularity among retail traders this year. On Stocktwits, message volume containing the MULN stock ticker has increased significantly since the start of March.
Currently, there seems to be little company-specific news to explain Mullen’s recent price action. However, the company was recently featured on Yahoo! Finance Live. During the feature, the hosts discussed Mullen Automotive’s progress in creating solid-state battery technology. They also mentioned that Mullen’s FIVE electric SUV crossover seeks to be “conceptually” competitive with Tesla’s (NASDAQ:TSLA) Model Y and Ford’s (NYSE:F) Mach E.
Here’s what else investors should know about MULN stock moving forward.
Why Is MULN Stock Up Today?
While it is up today, investors should still take caution with MULN stock. Why? Mullen is a penny stock with a market capitalization under $85 million. Additionally, it has an extremely low float of 1.8 million shares as well as an average 10-day trading volume of 212 million shares. That means its float has been exchanged 117 times per day for the past 10 days. As a result, the stock is susceptible to quick, volatile price movements. Furthermore, it seems that retail traders are behind this phenomenon based on its popularity on social media.
This EV company’s positive price acceleration seems to have begun on Feb. 22, after CarBuzz released an article praising the Mullen FIVE. Since then, shares have climbed by over 250%. In the article, CarBuzz touts Mullen as the “real deal,” saying that it will be “joining Tesla, Rivian, and Lucid as real American competition to legacy automakers as the EV market grows.”
Some think Mullen can stack up against the likes of Rivian (NASDAQ:RIVN) and Lucid (NASDAQ:LCID). However, investors should note that Mullen is still down more than 50% since the start of 2022. This price decline can mainly be attributed to supply-chain issues and inflation. These factors have increased the cost of raw materials related to car production. On top of that, Mullen has received very little Wall Street coverage. Based on this, any announcements from the company could send shares flying in either direction, driven by retail trading.
What’s Next for Mullen Automotive?
Moving forward, Mullen expects to begin production of the FIVE by next year. What’s more, by 2024, the company is expected to start deliveries. Mullen has also purchased a production facility in Tunica, Mississippi for a “very reasonable price.” The company plans to expand the facility in order to address future demand.
Mullen’s next vehicle — the second generation FIVE Crossover — is expected to begin prototype testing in 2025.
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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.
