Mullen Automotive (NASDAQ:MULN), a small electric auto maker, rose 3% in pre-market trading.
The company issued preliminary results Aug. 9, claiming $99 million of cash as of Aug. 8.
Mullen has been trying to produce an electric car called the Five, with a facility in Mississippi. It also claims an engineering office in Detroit and sales offices in California.
But Mullen remains a penny stock, opening Aug. 15 at about 85 cents a share, with a market capitalization under $400 million.
What’s Going on With MULN Stock?
MULN stock was trading at over $10 per share a year ago, but potential has not been enough to excite investors in 2022. Mullen shares are down over 90% from their highs. Other small electric car makers, like Rivian Automotive (NASDAQ:RIVN) and Lucid Group (NASDAQ:LCID), are also down on the year.
I wrote about Mullen in May, and about CEO David Michery, a former music executive. This was a month after Hindenburg Research issued a negative report on the company. My view was that Mullen lacked the cash to meet corporate objectives.
The Aug. 9 preliminary report, however, highlighted a cash balance of $99 million, a 77% reduction in debt, and $318 million in new financial commitments. It also claimed an order from DelPack Logistics, a delivery partner for Amazon (NASDAQ:AMZN), for up to 600 electric vans, with delivery starting in November.
What Happens Next?
The earnings, whenever they come out, will move the stock.
I personally doubt $99 million, or even $318 million, is enough cash to make a big dent in the market. Even if Mullen has valuable battery technology, as it claims, it’s getting late in the market’s evolution to capitalize on it.
I could be wrong, but my guess is Mullen stock is going nowhere fast.
On the date of publication, Dana Blankenhorn held a long position in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.