Mullen Automotive (NASDAQ:MULN) simply can’t snap its losing streak. The controversial eclectic vehicle (EV) producer has reported multiple positive catalysts in the past month. These types of developments, such as successfully completing deliveries and completing successful pilot programs, would boost a more stable company. But through it all, MULN stock remains firmly in the red, shedding more than 50% since early March 2022. Despite some slight gains as the month ended, Mullen has failed to sustain any positive momentum and seems intent on continuing its race to the bottom.
No matter what the company reports, the stock simply can’t demonstrate any sustainable growth. As long as this persists, MULN stock will only appeal to speculative retail traders. That isn’t a recipe for growth, no matter what the r/WallStreetBets crowd might say.
What’s Happening With MULN Stock?
The short answer to the question posed above is simply: “Not much, and that’s the problem.” MULN stock has tried to rally today, but as of this writing, it is down 0.79% for the day. This is a good reminder of the company’s track record of failing to pull into the green on days when positive headlines dominate the news cycle. As InvestorPlace’s Eddie Pan reports, Mullen recently announced plans to begin testing solid-state battery technology later this year. This follows news of the company meeting a significant delivery milestone and wrapping up a pilot program with LAX deemed a success.
MULN stock rose following the delivery news, and some investors cheered. However, it is important to remember that shares dipped to a 52-week low just a week before, falling below 90 cents per share. To highly speculative traders, that might have been worth a gamble on the low price point alone. But days like this are a good reminder that betting MULN is a fool’s errand, no matter how low it goes. And fulfilling a basic delivery milestone doesn’t mean a turnaround is imminent.
One Seeking Alpha contributor recently laid out why investors should still approach Mullen carefully. As he sees it, the company’s reliance on Chinese manufacturing and lack of a sound business model will make it difficult for it to hold its own against larger EV makers. In his words:
“Even if Mullen actually built its manufacturing capabilities to deliver the 6,000 van order in a reasonable time (which I highly doubt), the lack of technological moat casts a shadow over its long-term prospects. Investors should proceed with caution, and a sustained rebound is, in my view, unlikely.”
That take makes a lot of sense, especially considering Mullen’s failure to innovate and execute successfully. This is especially important as the threat of increasing competition looms over small EV producers.
Mullen’s Fate Still Bleak
It’s hard to say exactly what Mullen investors should expect, but there’s little evidence to suggest it will be positive.
At this point, it doesn’t seem likely that anything short of a Tesla (NASDAQ:TSLA) acquisition could boost MULN stock permanently. The company has done nothing but gradually trend downward for months with occasional superficial surges. Some overly optimistic traders may overhype the recent delivery news, but it is dangerous to buy into it.
Until Mullen proves that it can demonstrate some actual sustainable growth, investors should approach even the news with extreme caution.
On the date of publication, Samuel O’Brient 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.
