Mullen Automotive (NASDAQ:MULN) stock accelerated more than 20% at one point today. Shares have also risen even further from the company’s 52-week low of 8.9 cents on March 28. On that day, the electric vehicle (EV) maker announced it had filed a lawsuit against Intersection Media Group (IMG) for an article published on dot.LA. The article allegedly contained false and defamatory information regarding Mullen’s settlement with Qiantu Motors.
The article, which has since been edited, was originally titled “Mullen Automotive Pays Nearly $20 Million to Settle Lawsuit with Qiantu.” The edited version of the article replaced “Nearly $20 Million” with “Millions.” The edit also deleted this quote in whole:
“MULN is trading at a whopping $0.14 per share today, meaning that adds another $10.5 million to the pot at today’s price.”
This quote is in relation to an agreement between Mullen and Qiantu. Per the agreement, Qiantu would receive warrants to purchase up to 75 million shares of MULN stock.
Here’s what else investors should know as MULN climbs higher today.
MULN Stock Trades Higher Ahead of Randy Marion Deadline
On top of the lawsuit news, Mullen’s delivery deadline with Randy Marion Isuzu (RMI) is also just one day away.
“Mullen anticipates making Class 1 EV deliveries to various commercial customers before the end of March 2023,” said CEO David Michery in a press release. The company’s original agreement with RMI stipulated that it would order 6,000 Class 1 EV cargo vans from Mullen worth approximately $200 million. RMI should receive the first of these vehicles by tomorrow. When the entirety of the order will be complete is unknown, as Mullen has not provided a timeline. Realistically, though, the delivery of all 6,000 vehicles should take quite some time.
Investors are wondering about the catalyst that has sent MULN stock higher in recent days. Based on the latest available data, 165.83 million shares were sold short as of March 15 with a total value of $24.69 million. That’s equivalent to a short interest as a percentage of float of about 11%.
Generally, a short interest above 10% is considered high enough to drive a significant short squeeze. MULN stock is down by more than 45% this month. So, investors could rationalize that short sellers are taking profits following a major decline in a short window of time. Short sellers take profits by buying the underlying stock, which could result in a higher share price.
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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.