Mullen Automotive (NASDAQ:MULN) stock opened in the green today after the company announced that it had bought back 2 million shares through its $25 million buyback program. Mullen’s board authorized the buyback in July, which expires on Dec. 31. The electric vehicle (EV) company has now used $5.61 million of the program to buy back shares, meaning that there is still $19.38 million remaining. Earlier this month, Mullen bought back 3.7 million shares worth $3.62 million.
“As I have stated on many prior occasions, I believe that our stock is undervalued,” said CEO and Chairman David Michery. “The Company has a strong balance sheet and we continue to execute on our business plan, including our recent Class 3 production start with the first vehicles rolling off the line.”
Mullen Buys Back 2 Million Shares of MULN Stock
The buyback program was also initiated in order to help MULN stock reach $1. The company has a deadline of Sept. 5 for its shares to close at or above $1 for at least 10 consecutive business days, but generally no more than 20 consecutive business days. Based on the current situation, it appears that Mullen will not achieve this, as there are only four business days between today and Sept. 5. If Mullen fails to achieve the requirement, Nasdaq will provide it with a notice that the stock will be delisted, which Mullen can appeal to a hearings panel.
However, another development has overshadowed the buyback news. Yesterday, Mullen disclosed that it had filed a lawsuit against TD Ameritrade, Charles Schwab (NYSE:SCHW), National Finance Services and John Doe defendants one through 10 for alleged market manipulation. In the complaint docket, Mullen accuses the defendants of selling over 34 million fictitious and/or shareholder-owned MULN shares between May 4 and Aug. 25, or the relevant period. As a result, Mullen believes that the supply of MULN stock that was available for short selling was illegally increased.
These actions “have devastated Mullen’s share price and crippled its business.” Meanwhile, Mullen does not address its 80% decline between Jan. 3 and May 3 of this year in the docket, as it only relates to the relevant period.
This seems to be a battle of David vs. Goliath, as Mullen is going up against multibillion dollar broker-dealers. It appears that the defendants have not yet publicly commented on the lawsuit.
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On the date of publication, Eddie Pan 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.
