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Mullen Stock Manipulation? Why the Scary Press Release Should Give Investors Pause.


  • Mullen Automotive (MULN) is demonstrating operational progress with a local government contract in the District of Columbia.
  • However, Mullen Automotive has expressed concerns about the performance of the company’s stock.
  • Investors should wait a while if they’re thinking about buying MULN stock.
MULN stock - Mullen Stock Manipulation? Why the Scary Press Release Should Give Investors Pause.

Source: Ringo Chiu / Shutterstock

If you’re considering buying shares of electric vehicle (EV) manufacturer Mullen Automotive (NASDAQ:MULN) now, you have a lot to think about. It’s certainly encouraging that Mullen has a contract with the government of Washington, D.C. On the other hand, Mullen Automotive’s recent press release about possible stock manipulation is alarming. All in all, cautious investors should wait for further developments and more clarity before taking a position in MULN stock.

This isn’t to suggest that all of the news surrounding Mullen Automotive is negative. I’m definitely impressed with Mullen’s advancement in developing Energy Management Module (EMM) technology. In particular, Mullen Automotive revealed that “previous testing” in EMM technology “includes EV range increases of 60-70%.”

Yet, this isn’t a valid reason to immediately hit the “buy” button with Mullen stock. An announcement from Mullen Automotive, while evidently intended to quell shareholders’ concerns, might only add to the investors’ feelings of anxiety and doubt.

Mullen Automotive Shows Progress in the U.S. Capital

If we can move away from MULN stock and just look at Mullen Automotive for a moment, the company has some good news to share. Mullen’s majority-owned subsidiary, Mullen Advanced Energy Operations (MAEO), commenced execution on a $680,000 contract awarded to EV Technologies, LLC, by the District of Columbia, Washington, D.C.

Not only will this provide a potential revenue source to Mullen Automotive, but it will also offer the company a chance to show off its EMM technology. It sounds like a win-win scenario for everyone involved, including Mullen’s shareholders.

Not long after that announcement, Mullen Automotive issued an update that “Mullen began testing and install of EMM units this week in Washington, D.C.” Hence, it appears that everything is going according to plan. I’m usually bullish on companies with government contracts, so I should be recommending MULN stock as a must-own – right?

An Alarming Announcement About MULN Stock

Not so fast. Mullen Automotive’s EEM technology could be a game-changer, but there’s other news to consider. So, don’t even consider buying Mullen stock until you’ve read the company’s eye-opening press release from top to bottom.

You might already be aware that the Nasdaq exchange granted Mullen Automotive a 180-day extension to comply with the exchange’s minimum bid price rule. Prior to that, the Nasdaq exchange had issued a noncompliance warning to Mullen because the company’s shares had closed below $1 for 30 consecutive business days.

Now, Mullen’s loyal investors apparently have even more issues to worry about. According to the company, Mullen Automotive is “taking certain affirmative steps” due to the “extraordinary trading volume” of MULN stock, and because there’s evidence indicating “unusually high levels of failure to deliver on short sales as reported to the U.S. Securities and Exchange Commission.”

While Mullen Automotive assures that it’s taking “steps,” the only step it mentions in the press release is “retaining outside counsel.” That “counsel” is supposedly working with a company tracks “shareholder ownership” and monitors “broker-dealer and shareholder movement.”

Mullen even went so far as to mention “potential market manipulation and illegal short selling” in the press release. If you’re thinking that all of this sounds vague and scary, I agree with you 100%. Mullen Automotive is doing a poor job of quelling its shareholders’ anxiety, if that’s the goal here.

Don’t Be Hasty With Mullen Stock

Mullen Automotive is making progress on the operational front — no doubt about that. Besides, having a government contract is a huge advantage for practically any company. Yet, I’m deeply concerned about the “potential market manipulation and illegal short selling” that Mullen Automotive discussed.

It’s enough to scare cautious investors away from MULN stock until there’s more clarity on this issue. Sure, you might like the company’s EV technology, and that’s understandable. Nevertheless, this isn’t a good time to risk your hard-earned money on Mullen Automotive.

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.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

Article printed from InvestorPlace Media, https://investorplace.com/2023/05/mullen-stock-manipulation-why-the-scary-press-release-should-give-investors-pause/.

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