It’s time for investors to realize that Mullen Automotive (NASDAQ:MULN) has nothing left to offer. Not that it had much to begin with. The electric vehicle (EV) producer shot to Wall Street’s radar as a highly speculative meme stock play. Since then, it has steadily trended downward amid an avalanche of missed deadlines and legal battles, reaching a 52-week low earlier last week. The company has reported some positive developments, such as claiming to be on track for a major delivery. But even on its best days, MULN stock can’t achieve any sustainable growth, and there’s nothing to suggest that it can.
This is further evidenced by Mullen recently announcing plans to produce an EV supercar, and shares still remained in the red.
What’s Happening With MULN Stock
In the week since the supercar news broke, MULN stock has continued declining at an accelerated rate, falling 19%. This week isn’t off to a better start. As of this writing, shares are down 5.5% for the day, and their current trajectory suggests that they have further to fall.
Mullen’s planned supercar is called the Mullen GT. This vehicle is the result of a distribution rights deal with Chinese automaker Qiantu Motors. Under it, Mullen will redesign and rebrand Qiantu’s DragonFLY as its new supercar. According to a statement released by the company, it will be able to go from 0-60 miles per hour (MPH) in 1.95 seconds and reach a top speed of 200. The Mullen GT will be a rebranding of Qiantu’s DragonFLY K50. As InvestorPlace assistant news writer Eddie Pan reports:
“The K50 is similar to Mullen’s GO, formerly called the I-GO, in that both vehicles are sourced from China. Still, Mullen will have to tweak and re-engineer the K50 in order to meet U.S. homologation requirements and customer expectations. The changes will be ‘in line with Mullen’s vehicle design language currently found in the Mullen FIVE and Mullen FIVE RS.'”
News of a supercar in the works would elevate a more reliable EV stock, such as Tesla (NASDAQ:TSLA) or Lucid Motors (NASDAQ:LCID).
But this is Mullen, a company that hasn’t given investors much cause for optimism in recent months. What it has is a track record of missing deadlines and having high-ranking staff members quit. Almost every headline gives investors more reason to approach the company with extreme caution. The Nasdaq will delist MULN stock if it doesn’t reach at least $1 per share by Sept. 5. And since it currently trades at $0.10 per share, that’s a lot of ground to make up.
A Supercar Won’t Supercharge Mullen
This is not to say that there is anything wrong with producing a supercar. However, since Mullen has proven to investors that it can’t be trusted to get cars onto the road, it will be hard for anyone to see this news as a growth catalyst. As InvestorPlace contributor Josh Enomoto notes, “it’s going to take a herculean effort to convince customers to bet big on a no-name vehicle.”
Mullen’s problem isn’t even that it is a “no-name vehicle,” though. Its undeniable, underlying problem is that it has proven repeatedly that it is a poorly-run company with no real growth prospects. For that reason, it will take much more than a supercar for MULN stock to remain on the Nasdaq.
On the date of publication, Samuel O’Brient 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.