Mullen Automotive (NASDAQ:MULN) stock is in focus, as the company has announced the commencement of its $25 million buyback program, effective as of Aug. 16 and expiring on Dec. 31. On Aug. 16, Mullen used $3.26 million of its buyback program to repurchase 3.7 million shares of MULN stock.
“We believe that our stock is undervalued,” said CEO David Michery. “The Company has begun production of our Class 3 EV with deliveries pending to customers and a strong balance sheet allowing us to execute on our business plan.”
Unfortunately, MULN closed below $1 yesterday. Shares of the electric vehicle (EV) company had previously closed above $1 for three consecutive business days before Aug. 16 broke the streak. In order to regain compliance with Nasdaq, MULN must close above $1 for at least 10 consecutive business days, but generally no more than 20 business days. The company has a deadline of Sept. 5 to achieve this or face the possibility of being delisted.
MULN Stock: Mullen Begins $25 Million Buyback Program
Along the with initiation of the buyback program, Mullen also announced that CEO David Michery had purchased 102,040 shares at an average price of 98.42 cents per share, amounting to a total value of just over $100,000. However, Michery’s Form 4 to evidence the purchase contains an interesting footnote:
“The Reporting Person’s purchase of common stock reported herein may be matchable under Section 16(b) of the Securities Exchange Act of 1934, as amended, to the extent of 102,040 shares, with the Reporting Person’s transfer on June 15, 2023 of 232,331 shares of common stock (reflects 1:9 reverse stock split effective August 11, 2023). The Reporting Person has agreed to pay to the Issuer the full amount of the profit realized in connection with the short-swing transaction.”
On June 15, Michery transferred 2.09 million shares to an unknown entity. Adjusted for the 1-for-9 reverse stock split that matches with the 232,331 shares mentioned in the footnote. Meanwhile, Section 16(b) of the Securities Exchange Act of 1934 entails that insiders who profit from either a purchase or sale or a sale or purchase of their company stock within a time range of six months or less must return the profits to the company.
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.