This morning, shares of Mullen Automotive (NASDAQ:MULN) stock are trading lower by over 5%. This may be due in part to a recent insider sale.
Specifically, the U.S. Securities and Exchange Commission received a Form 4 from a director at the electric vehicle (EV) company yesterday. Director Kent Puckett reported selling 31,067 shares of MULN stock at an average price of $3 per share. In total, the transaction amounted to around $90,000.
Here’s what investors need to know about Mullen Automotive moving forward.
Director Kent Puckett Sells MULN Stock
Out of the 31,067 shares sold by Puckett, 18,611 shares were sold directly while 12,456 shares were sold indirectly. The shares sold indirectly were transacted by PCS Mastermind, of which Puckett is the “managing member.”
After the sale, Puckett now owns no shares of Mullen Automotive. However, the director isn’t the only executive who has recently sold MULN stock.
On March 16, CEO David Michery also reported selling 200,000 shares. The shares were sold at prices ranging between $1.65 and $1.66, amounting to a total of around $330,000.
Why exactly did these two insiders make their sales?
Insiders are not required to disclose their reasons for selling shares. What’s more, they may sell for a variety of reasons, whether it be for personal expenses, taxes or a loss of faith in the company. However, these two insiders in particular may be capitalizing on recent MULN gains. Shares of the company are up over 100% in the past month.
That in mind, let’s take a quick look at aggregate insider transactions. Over the past 12 months, insiders have reported buying 2.91 million shares of the stock and selling 1.77 million shares. That amounts to a total net activity of 1.15 million shares purchased.
Mullen Under Investigation by Two Law Firms
Insiders aside, two law firms — Bronstein, Gewirtz & Grossman and Hagens Berman — also recently announced investigations into Mullen Automotive for possible securities law violations. The two firms cited a recent short report from Hindenburg Research as evidence for their claim.
This short report alleges some Mullen EVs are sourced directly from China. It also claims the company’s recent solid-state battery updates are a “rehash of testing the company had already announced in 2020.” Hagens Berman investigation lead Reed Kathrein explained the following:
“We’re focused on investors’ losses and whether Mullen misled investors about its battery technology and commercial prospects.”
Meanwhile, Bronstein, Gewirtz & Grossman points out from the report that Mullen only spent $3 million on research and development (R&D) in 2021. The law firm also cites that Mullen claims its solid-state battery is “on track for commercialization in 18 to 24 months.” The firm suggests Mullen’s minimal amount of R&D spent would not be able to support such advanced technology.
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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.