Mullen Automotive (NASDAQ:MULN) faces new red flag issues with the April 6 release of a short report by Hindenburg Research. At the time MULN stock was at $2.72 per share the day before the release. It closed at $2.51 on Friday, April 8.

The Hindenburg Research article says Mullen is “Yet Another Fast-Talking EV Hustle.” It claims Mullen has “bold claims of ground-breaking technology, near term production of its EV vans, and a major as-yet-unnamed Fortune 500 customer.” It allegedly spent only about $3 million in R&D on its battery technology. It is on track to commercialize in 18 months to 24 months. That puts it ahead of every major technology and automaker in the industry.

Hindenburg says Mullen mispresented its battery test results, and allegedly a production JV doesn’t exist. The report says Mullen does not have Environmental Protection Agency (EPA) approval to sell EV vans. It also allegedly does not have enough equipment in its plant to produce its EVs.

More disturbing is Hindenburg’s claim that Chairman and CEO, David Michery led five failed penny stocks prior to Mullen. Also, a 29% holder of voting power, Terren Peizer, has issues. He allegedly has backed numerous stocks that have spiked to euphoric highs, only to plummet later. Moreover, Michael Wachs, Mullen’s third-largest shareholder, served time in jail for bank fraud.

Investors in MULN stock should expect that where there’s smoke, there’s usually fire. Yahoo! Finance reports that 42.66% of the float is held short. Short sellers have borrowed and sold almost half of the shares expecting MULN stock to crater. The red flags are abundant, as I pointed out in my previous article.

On the date of publication, Mark Hake 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.