Today’s otherwise bumpy market does have a few winners to note. Investors in Mullen Automotive (NASDAQ:MULN) are certainly in a positive mood today, with shares of the electric vehicle (EV) maker skyrocketing. As of this writing, shares of MULN stock have surged more than 14% on what appears to be short-squeeze interest.
While the company’s cost to borrow has come down to “only” 80% as of yesterday, it’s clear that retail traders are not out of the game yet. Interest remains high around this stock, which is now down more than 90% (and that’s after today’s rise).
That said, there is another big catalyst on the horizon. As InvestorPlace Assistant News Writer Eddie Pan pointed out in a recent piece, there’s a $90 million potential catalyst on the horizon for Mullen. As it so happens, this catalyst is set to take place in less than three weeks.
Let’s dive into why investors in MULN stock should circle Jan. 24 on the calendar.
What’s Driving MULN Stock Higher?
Short-squeeze interest in any stock is a big enough near-term catalyst to focus on for most investors. However, it’s Mullen’s upcoming $90 million payout of preferred stock over Q1 that has many investors excited.
Essentially, as part of a debt-to-equity swap undertaken last year, Mullen amended its securities purchase agreement (SPA) to include convertible notes instead of preferred stock and warrants. That said, a second amendment of this agreement stipulated that $90 million will be paid out to investors in the form of Series D preferred shares on Jan. 24 and Feb. 24. According to the most recent amendment, investors will be able to purchase these preferred shares at a price no higher than $1.27 (with a floor of 10 cents). Accordingly, demand for MULN stock may increase in the coming weeks, depending on the number of investors looking to take part.
Overall, it appears clear that Mullen remains a highly speculative stock in a rather difficult economic time. Investors will have to wait and see how this stock performs from here. That said, this is a catalyst investors should keep an eye on moving forward.
On the date of publication, Chris MacDonald 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.
