Last September, the Nasdaq informed Mullen Automotive (NASDAQ:MULN) that it would have 180 days, or until March 6, to reach a price of at least $1 for a minimum of 10 consecutive business days. March 6 is now past us, and Mullen could not fulfill the requirement. However, it was eligible to file another 180-day extension as long as it could provide Nasdaq with a compliance plan in the form of a reverse stock split.
This morning, Nasdaq announced that it had provided Mullen with the extension. Now, Mullen will have until Sept. 5 to achieve a minimum price of $1 for at least 10 consecutive business days.
“Consistent with my message to our shareholders, we will use our best efforts to regain compliance to meet Nasdaq’s requirement for a $1 minimum bid price,” said CEO David Michery.
MULN Stock Receives 180-Day Extension to Reach $1
Mullen also stated it would implement a reverse stock split prior to the expiration of the new extension if it can not meet the $1 requirement. This doesn’t come as a huge surprise. The company already announced that it would do this after its special meeting of stockholders in January. And it said it would implement a reverse stock split if it could not achieve the $1 requirement following an extension to September.
Today, MULN stock is trading at about 20 cents, meaning it must gain 400% in just six months to hit $1. That isn’t an easy accomplishment. Meanwhile, Mullen didn’t mention another deadline that is closer than September.
This year, the Russell 2000 index will hold its rank day on April 28. On that day, members of the index must be priced at a minimum of $1 to remain included. Companies with a stock price of less than $1 will be eligible if the average daily closing price of the last 30 days prior to the rank day is at least $1. Following rank day, the index will then rebalance in June.
Mullen previously stated that it would “evaluate if it is in the best interest of shareholders” to enact a reverse split in June if MULN is still below $1. However, the company has not yet addressed the Russell 2000 rank day deadline in April.
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.