The quarterly 13F deadline has passed, meaning retail investors can get a look what institutional investors are betting on as of the thrid quarter. During the quarter, both BlackRock (NYSE:BLK) and Vanguard disclosed purchasing more shares of Mullen Automotive (NASDAQ:MULN).
Mullen has announced several new initiatives this week. Front and center is the proposal for a reverse stock split and to increase authorized shares outstanding from the current 1.75 billion to 5 billion, marking an increase of 185%.
MULN stock is currently trading below $1, which makes it noncompliant with the Nasdaq requirement for a minimum bid price of $1. The electric vehicle (EV) company has until March 6, 2023 to trade at $1 or greater for ten consecutive business days. If it is unable to achieve this by the deadline, it can file for an 180 calendar-day extension.
With that in mind, let’s take a look at BlackRock and Vanguard’s purchases.
MULN Stock: Vanguard and BlackRock Double Down
BlackRock scooped up 18.41 million shares during Q3, increasing its existing position by 233%. Following the purchase, the firm now owns a total of 26.29 million shares. Meanwhile, Vanguard purchased 9.88 million shares, increasing its existing position by 77% and bringing its total shares owned to 22.6 million shares.
The two firms are not required to disclose the reasoning for their purchases. However, Mullen was added to the Russell 2000 and 3000 indexes at the end of Q2. Both firms operate Russell index exchange-traded funds (ETFs), so some of the purchases may be attributed to index additions and rebalancing.
BlackRock operates the iShares Russell 2000 ETF (NYSEARCA:IWM) and the iShares Russell 3000 ETF (NYSEARCA:IWV), while Vanguard offers the Vanguard Russell 2000 Index Fund ETF (NASDAQ:VTWO) and the Vanguard Russell 3000 Index Fund ETF (NASDAQ:VTHR).
If Mullen seeks to remain on the Russell indexes, it must have an minimum bid price of $1 during the “rank day” in May. If MULN trades at an average closing price of $1 or above in the 30 days before the rank day, but less than $1 on the rank day, it will be eligible to remain on the indexes as well.
Unless MULN appreciates 300% to 400% before the next rank day, it could be removed from the indexes. That’s why the company has proposed a reverse stock split, which will be voted on at the special stockholders meeting on Dec. 23.
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.
