Despite an encouraging post from CEO David Michery, shares of Mullen Automotive (NASDAQ:MULN) stock opened in the red this morning. The CEO shared an update on Instagram with the caption “Another long day at the Mullen office. Lots of exciting news to come.”
Meanwhile, the electric vehicle (EV) company will hold yet another special meeting of stockholders later today. The first meeting, which was originally scheduled for Dec. 23, was adjourned to Jan. 19. On Jan. 19, shareholders voted to approve Proposal No. 1, which involves a reserve stock split in a range between 1-for-2 and 1-for-25, and Proposal No. 4, which involves issuing $150 million in notes and up to $190 million in additional shares of Series D preferred stock.
However, the Jan. 19 meeting was adjourned to today to provide shareholders with more time to vote on Proposal No. 2. Let’s get into the details.
MULN Stock Holders to Vote on Proposal No. 2
Proposal No. 2 seeks approval to increase authorized common stock to 5 billion from 1.75 billion. Earlier this week, Delaware’s Court of Chancery sided with Mullen during its hearing, paving the way for the company to file for Proposals No. 1 and No. 2. Plaintiffs had argued that the vote to increase authorized shares during Mullen’s 2022 annual meeting on July 26 was invalid. The court ruled for the status quo order on Mullen to be lifted, which prevented Mullen from acting upon the results of its special meeting of stockholders.
Increasing authorized shares can lead to dilution if Mullen chooses to increase the shares outstanding. On the other hand, issuing more shares will provide Mullen with funds to keep its business running. Mullen has also noted that it will begin production of the FIVE in late 2024, which is extremely capital-intensive.
David Michery Receives “Naked Short Selling” Petition
A petition for Mullen to address market manipulation and naked short selling has reached its goal of 10,000 signatures. Yesterday, the creator of the petition tweeted that he had personally delivered the document to David Michery. At the time of delivery, Michery said that he had donated $1,000 towards the cause and would take action.
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.