- Mullen Automotive (MULN) remains a volatile and riskier battleground stock.
- Slick-looking future products could be empty promises per MULN bears.
- Investors don’t have to be in it to win it at today’s suspect MULN stock price.
It’s not front page news that’s gripping Wall Street. But, among a subset of investors, battleground electric vehicle (EV) play Mullen Automotive (NASDAQ:MULN) remains a big deal. And from the looks of it, that’s not going to change any time soon. MULN stock will remain busy, irrespective of what’s driving other investor decisions.
Through-the-roof inflation, a hawkish Federal Reserve, vulnerable consumers, supply chain disruptions, an at-risk global economy are all influencing the stock. Throw in the consequence of a prolonged battle with Covid-19 and a still unsettled war in Ukraine, and they’re more than just talking points.
Wall Street has been persuasively selling risk assets of sizes and mission statements in 2022 with the benchmark averages down 8.5% to as much as 20%. And MULN stock has been certain collateral damage with growth plays slammed much harder and shares off 75%.
But Mullen Automotive’s difficulties are hardly that simple. And it would be a mistake to neatly package them under the pretense of broader macro issues. Today let’s review some of MULN stock’s more recent plot developments, off and on the price chart, and why steering clear of the company continues to make sense.
| MULN | Mullen Automotive | $1.32 |
MULN Stock EV Podium Dreams
In some ways not much has changed in the month since I was last tasked to discuss MULN stock. It’s still about two years until, cross your fingers, until Mullen Automotive’s $55,000 compact, luxury EV crossover Mullen FIVE puts it rubber to the road.
Critical to the bull thesis in MULN stock and why holding a long position makes sense, the FIVE has garnered plenty of positive buzz after winning the prestigious ‘Top SUV’ ZEVAS award this past year. It won on the back of specs which have many anticipating the concept stage EV play could be a so-called Tesla (NASDAQ:TSLA) killer.
Yeah, the Mullen FIVE certainly looks the part of a badass vehicle.
Then there’s Mullen’s commercial EV vans. The company’s Class 1 EV and 2 EV cargo vans for fleet customers are set for launch later this year. Not much has changed there either. Appreciatively though, a finished product and revenue stream that doesn’t look like today’s bagel, does appear to be nearby.
Newer to MULN stock scene, the outfit announced plans to break ground for a facility in California for EV battery pack production. And just last week Mullen said it will begin testing on its next-gen, solid-state polymer battery cell which is purported to have a driving range of more than 600 miles. Results are set to be released in early May.
Mullen’s Other Fabrications
What’s being bullishly fabricated by the company may not be all that it’s cracked up to be. Mullen Automotive remains a pre-revenue EV play pitting bullish Redditors more interested in short-lived, short squeezes under typically hyped pretenses, against more entrenched bears whose ranks total about 15% of MULN stock’s float.
More to the point, short sellers have been winning in these sorts of plays now for more than a year now. And there are weaknesses in MULN stock that may prove too much to overcome.
Share dilution. Insider selling. You can check those undesirable boxes in MULN stock. Then there’s notorious, but on-the-money short seller Hindenburg Research. The firm recently called out Mullen’s solid state battery as a fabrication and the company as “yet another fast talking EV hustle” whose dots cannot be connected.
Along with serious cash burn and a challenged financial position, they’re among reasons why a significant bear population persists in MULN stock despite a market capitalization that’s dwindled to less than $425 million and share price fetching under $1.50.
Lastly, Reddit’s losing battle in MULN stock this year is unlikely a great sign given the group’s dismal track record from A to Z or rather AMC Entertainment (NYSE:AMC) to Zomedica (NYSEARCA:ZOM) and all those other fly-by-night and now, forgotten tickers in-between. Sorry, it’s not 2021 anymore folks.
Steer Clear of MULN Stock
From what’s been laid out today, my advice remains the same as when the stock traded for $3.05 following some sexy vroom, vroom PR from CarBuzz which had Redditors gassing up shares. And that recommendation is to stay out of harm’s way in MULN stock. It worked then and today it’s likely good advice.
If Mullen Automotive was to ever become a Tesla killer or even a fraction the size of the EV giant, today’s reality is so far removed from the proverbial winner’s circle, investors are better off waiting and then paying for a $2 billion or $3 billion valuation in MULN stock at a much higher share price.
The thing is, if MULN were ever able to add that type of value, it will be something other than further share dilution. Which today, is an almost a certain reality.
And at this point in time, if Mullen ever makes it into the bigger leagues of mid-caps, it’s actually much more likely to have something tangible to offer longer-term bullish investors, other than today’s fast money, all talk Reddit penny stock operations still driving shares.
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Read More: Penny Stocks — How to Profit Without Getting Scammed
On the date of publication, Chris Tyler did not have (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.
