For investors, electric vehicle (EV) manufacturer Mullen Automotive (NASDAQ:MULN) is a “love it or hate it” kind of company. Yet, you can find a reasonable middle ground by taking a very small position in MULN stock. It’s worth considering as Mullen Automotive recently issued a flurry of positive press releases.
First and foremost, I have to get this out of the way. The company’s reverse share split is not a reason to invest in Mullen Automotive. This strategy will keep Mullen compliant with Nasdaq minimum share price rules, at least for the time being.
However, you shouldn’t invest in Mullen stock unless you believe the company can actually grow and succeed. There’s evidence of this, so let’s check in and see what Mullen’s been up to lately.
Multiple Purchase Orders Should Bolster MULN Stock
Suffice it to say, Mullen Automotive has been quite active lately. For one thing, you should know that Mullen doesn’t just serve the private sector; the company is happy to build EVs for the public sector as well. In particular, Mullen Advanced Energy Operations (MAEO), a majority-owned subsidiary of Mullen Automotive, is now executing on a $680,000 contract awarded to EV Technologies, LLC, by the District of Columbia.
Furthermore, Mullen Automotive is willing to cater to institutions of higher education. For instance, Mullen recently received a second purchase order for EV cargo vans from the the University of North Carolina at Charlotte.
We’re not even done yet, believe it or not. Mullen Automotive also disclosed a whopping $63 million order for 1,000 electric trucks. That order is from an automotive dealer known as Randy Marion Automotive Group (RMAG). Brad Sigmon, fleet general manager and vice president of RMAG Fleet Operations, proudly observed, “We continue to receive great interest for Mullen’s commercial vehicles, especially the Class 3 cab chassis.”
Mullen Automotive Has a Cash Runway and Affordable Electric Cargo Vans
Some skeptics might assume that an EV startup like Mullen Automotive is a destitute “zombie” company. Yet, that’s actually not true at all. As of April 30, Mullen possessed $116.1 million of cash available for operations. Plus, keep in mind that Mullen Automotive has $263 million worth of purchase orders from RMAG.
In other words, there’s no need to vilify Mullen Automotive as a “zombie” company without any meaningful, lucrative operations. It’s also worth noting that Mullen is providing businesses with a highly affordable commercial vehicle. After a $7,500 U.S. federal tax credit, the Mullen ONE Class 1 Urban Delivery EV Cargo Van has an ultra-low net price of $27,000.
It’s a smart move for Mullen Automotive to make this electric cargo van available at such a reasonable price point. This should make Mullen more competitive as the company can become a go-to source of affordable electric cargo vans for businesses of all sizes.
The Bull Case for Mullen Stock Is Strong
Mullen Automotive has a better capital position than the company’s critics might assume. Moreover, Mullen is staying busy with purchase orders from the public and private sectors.
Prospective investors should also take note of Mullen Automotive’s introduction of a reasonably priced commercial vehicle. All in all, these factors contribute to a powerful bull case for MULN stock. So, feel free to gauge your tolerance for risk, and then consider taking a small share position in Mullen Automotive.
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On the date of publication, David Moadel 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.