Dear MULN Stock Fans, Mark Your Calendars for Jan. 25

  • Shares of EV manufacturer Mullen Automotive (MULN) suddenly skyrocketed late Friday.
  • Management punted a share expansion proposal to next week.
  • MULN stock faces increasing criticism across multiple avenues.
MULN stock - Dear MULN Stock Fans, Mark Your Calendars for Jan. 25

Source: Ringo Chiu /

During a final push by the major indices to end Friday on a high note, Mullen Automotive (NASDAQ:MULN) showed Wall Street how it was done, skyrocketing to a double-digit gain. It’s not entirely clear what caused the change as up until 2:00 p.m. Eastern, MULN stock posted a relatively muted upside. Still, a contributing factor could stem from an adjourned meeting to recommence on Jan. 25.

Earlier this week, anticipation mounted regarding a special shareholder meeting that occurred on Jan. 19. Centrally, as InvestorPlace writer William White mentioned, the meeting sought to discuss two putative stockholder class actions filed against the electric vehicle (EV) manufacturer. Essentially, the lawsuits allege that Mullen had no right to raise its outstanding share count back in July 2022 during the annual meeting of stockholders.

As well, yesterday’s special meeting focused on a reverse stock split proposal. According to a report by, Mullen in an investor relations call revealed that it approved the split. However, another line item — billed as Proposal No. 2 to increase the authorized share count from 1.7 billion to 5 billion — could not reach a decision. Therefore, the company postponed the decision until Wednesday of next week.

Fundamentally, Mullen cited the need for clarification regarding the aforementioned stockholder class actions. The Court of Chancery, located in Mullen’s state of incorporation of Delaware, will likely side with either the EV upstart or the plaintiffs. Notably, the hearing is set for Jan. 23, leaving a few anxious days for MULN stock.

Confusion and Concerns Run Deep Against MULN Stock

Irrespective of what eventually materializes for Mullen next week, many investors have lost patience with MULN stock. For one thing, while the reverse split would raise the Mullen share price above $1, it’s possible that investors will view the action as a cynical attempt to stay listed on the Nasdaq exchange.

Further, as regulatory agencies such as the U.S. Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) state, seasoned companies rarely initiate reverse splits. Typically, such actions stem from the domain of low-priced, high-risk ventures, an accurate description of MULN stock.

Another problem that both and InvestorPlace contributor Dana Blankenhorn point out is that Mullen desperately needs cash. Unfortunately, as a pre-revenue enterprise, short of incurring additional debt, the company must issue new shares of MULN stock. Of course, such a move would only dilute the value of existing shares.

Further,’s David Shultz noted that “[t]he really wild thing here is that the reverse split doesn’t impact how many shares Mullen can issue.” Therefore, even if management decided to reverse split at 1-for-10, “… Mullen could still increase the number of authorized shares to 5 billion (if the vote passes and the courts agree this is all legitimate).”

Why It Matters

Shultz also warned that Mullen’s intended actions may spark unintended consequences for MULN stock. “Short interest often increases following a reverse split as well. If that’s the case for Mullen, we could see the stock shorted back into the penny-range all over again,” the author wrote.

Interestingly, data from Fintel noted a conspicuous increase in this very metric. On Jan. 6, the short interest for MULN stock was 10.83% of the float. Later, on Jan. 19, the short interest bumped up to 14.11%.

On the date of publication, Josh Enomoto 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 Publishing Guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare.

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