For months on end, retail investors have stood patiently by and waited as Mullen Automotive (NASDAQ:MULN) stock has gradually moved toward its death. The electric vehicle (EV) producer’s sad story is one of the classic modern meme stock, a company with little to no actual value that occasionally surges on short squeeze speculation only to fall even harder.
The r/WallStreetBets crowd loves MULN stock but history has proven time and time again that they can’t save it. Between the company’s checkered past and its inability to meet deadlines, there hasn’t been a reason to bet on Mullen in months. But the doomsday clock is ticking as MULN stock approaches a possible delisting. This is more than likely the end of the line for this troubled company.
The End Is in Sight for MULN Stock
Will Mullen be delisted from the Nasdaq? That question has been on investors’ minds for months, and for good reason. This unstable company has spent the year in a race to the bottom and not a slow one. As of this writing, MULN stock has fallen almost 99% since February 2023, and that figure is likely to pass 100% soon. A key deadline is approaching that will determine if Mullen is able to remain on the Nasdaq.
As InvestorPlace‘s Eddie Pan reports, Mullen needs to trade at no less than $1 per share for no less than 10 consecutive days to keep its spot on the major exchange. The deadline for the company to achieve this is Sept. 5. But as of today, there are only six days left before this important date. Since MULN stock hasn’t popped above $1 since Aug. 15, its prospects don’t look good.
You don’t need a Bloomberg terminal to know that this is bad news for Mullen’s loyal investors. Granted, delisted stocks often end up trading on an over-the-counter (OTC) exchange. But descending to OTC status doesn’t help a stock’s credibility. Fellow meme stock Bed Bath & Beyond (OTCMKTS:BBBYQ) serves as a key example of why being delisted ultimately spells the end for most stocks. The failed home furnishing retailer is about to liquidate, and when it does, its investors will be left with nothing.
Anyone still holding MULN stock could be heading towards the same fate. The only question is when.
What Comes Next
Mullen has already thrown a Hail Mary pass in the form of a reverse stock split. Normally regarded as a sign of distress, it didn’t push MULN to the price it needed to hit. As InvestorPlace markets analyst Thomas Yeung has noted, there are ways for a company in Mullen’s position to regain compliance. However, he adds that many similar companies have failed to regain compliance. There’s no reason to suspect that Mullen will fare differently if it attempts to fight the pending delisting. As Yeung reported about a week ago:
“I’ve long warned investors about investing in Mullen. Weak corporate governance and dilutive share offerings mean that every $100 invested in the stock during its November 2021 reverse merger is worth just 3 cents today.”
Investors should also tread carefully when it comes to Mullen’s leadership. CEO David Michery has stated that he feels MULN stock’s recent price action doesn’t reflect its actual value. But as Pan reported, Michery’s recent open letter to shareholders did not reflect its severe share dilution. Now his company has failed to regain Nasdaq compliance, and it is too late for it to successfully trade at $1 for 10 days. Investors should heed Yeung’s warning and ditch their MULN shares before the Nasdaq begins delisting it.
Mullen is a true stock market Cinderella, and the clock is about to strike midnight.
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.