Mullen Automotive (NASDAQ:MULN) stock finished the day up by about 7% after surging as much as 12% higher during intraday trading. The electric vehicle (EV) company’s posted its last press release on Feb. 14. So, why exactly are shares up?
The first reason could be an oversold bounce. Even with today’s bounce, MULN stock is still down by about 34% during the past month. That decline can be attributed to poor fourth-quarter earnings results, insider sales, a lack of production and a resale of up to 2.49 billion shares of common stock. As of Feb. 8, there were a total of 1.74 billion shares of common stock issued. In addition, Mullen has the authority to issue up to 5 billion shares of common stock.
Why Is MULN Stock Up 7% Today?
The second possible reason behind today’s rise is a short squeeze. As of Feb. 15, there were a total of 166.72 million shares sold short with a value of $57.27 million. That’s equivalent to a short interest of 11.3%, which actually fell by about 14% compared to the Jan. 31 reading. Still, a short interest of 11.3% is significant enough to drive a short squeeze. From Feb. 15 to Feb. 27, MULN stock declined 35%. A decline of that magnitude in such a short period of time seems large enough for short sellers to take profits by buying MULN.
The third reason could just be a result of buyers outnumbering sellers. Mullen frequently publishes press releases and an announcement from earlier this month may have piqued the interest of investors.
Back on Feb. 2, Mullen announced that it would begin a 60-day pilot program for its Class 1 EV cargo vans at Los Angeles International Airport (LAX) in collaboration with Menzies Aviation and Loop Global. Menzies will operate the pilot program, while Loop will provide charging services. The vans will be used toward “several use cases,” including “transporting cabin cleaning teams to aircraft.”
On top of that, Bollinger Motors will present its B4 Chassis Cab at Work Truck Week 2023 from March 7 to March 10. Mullen acquired a 60% controlling interest in the commercial truck company last September. Bollinger CEO Robert Bollinger also recently noted that the third generation of the B1 will make an appearance at the event.
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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.
