Though embattled electric vehicle (EV) manufacturer Mullen Automotive (NASDAQ:MULN) certainly had its charming moments for speculators, the romanticism may be fading. During Friday’s early afternoon trading, MULN stock traded hands at 11 cents per share, declining nearly 3%. In the trailing week, it’s down more than 16%.
Essentially, the challenge is that MULN stock lacks an attractive angle. Previously, market gamblers bid up shares on the possibility that the upstart EV maker could make good on its key promises. Here, charismatic CEO David Michery’s seemingly boundless confidence sparked an influx of retail investor dollars. However, that sentiment may have dried up.
According to TipRanks, 1.2% of portfolios the investment resource covers hold MULN stock. Typically, though, what the platform labels “top investors” have been the most successful in trading MULN. For instance, in January of this year, this elite cohort posted a performance of 29% up in the trailing 30 days. In contrast, the category of “all investors” suffered a loss of 2.5% during the same period.
At the time of writing, top investors in the past 30 days posted a 0.3% loss. On the other hand, all investors saw a profit, albeit a measly one of 0.4%.
Moreover, Fintel’s proprietary Short Squeeze Score saw MULN stock hit 61.96 out of 100 points. Per the investment platform, “[t]he number ranges from 0 to 100, with higher numbers indicating a higher risk of a short squeeze relative to its peers, and 50 being the average.”
Indeed, Mullen’s short interest as a percentage of its float remained the same from March 10 through March 23, 10.16%. Thus, speculators shouldn’t hold their breath regarding a short squeeze.
Pointed Questions Rise About the Fundamentals of MULN Stock
Earlier, much attention focused on Mullen’s disclosure of a purchase order for 6,000 Class 1 EV cargo vans from Randy Marion Isuzu, LLC, a Randy Marion Automotive Group (RMA) member. Disclosed in December last year, the announcement generated significant buzz for MULN stock. Notably, the press release stated that deliveries for the order would commence in the first quarter of 2023.
By logical deduction, this deadline approaches quickly, yet Mullen has provided practically no update other than reiterating the terms of the deal. Once again, Mullen apparently issued a promise that it couldn’t fulfill. Worse yet, it’s not the first time the company reneged on its word.
Back in June last year, Mullen’s CEO promised to reveal “everything” in an upcoming PR release regarding an EV delivery to a Fortune 500 company for its pilot program. The company scheduled the release for the end of Q2 2022. That day came and went with no update.
What’s worse, investors still don’t know who this Fortune 500 client is. While observers can only speculate regarding the reason for the information blackout, one possibility centers on production issues. After all, Michery stated that the client was pleased with the performance of the underlying vehicle.
To be sure, Mullen announced a binding agreement with DelPack Logistics, LLC, which partners with Amazon (NASDAQ:AMZN) under the e-commerce giant’s delivery program. However, the mystery Fortune 500 client refers to “a telecommunications provider in the Southeastern part of the U.S.”
With Mullen playing coy with its investors, it’s no surprise that MULN stock fell so much.
Why It Matters
Since the start of the new year, MULN stock has hemorrhaged nearly 66% of its equity value. In the trailing year, it’s down more than 96%. Subsequently, MULN also presently rides on a 52-week low.
While that might attract meme-stock traders, the technical details near the top suggest that further erosion may still be on the table.
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 InvestorPlace.com Publishing Guidelines.