Among the more beaten-down electric vehicle (EV) stocks in the market, Mullen Automotive (NASDAQ:MULN) has seen its valuation continue to decline in a rather consistent fashion over the past two years. In many cases, the declines investors have seen in MULN stock have come amid what most would consider to be good news. Today is such a situation, with Mullen Automotive seeing an 9% drop despite a rather optimistic catalyst.
Specifically, the company announced the launch of an intriguing artificial intelligence (AI) solution for its commercial customers. Called “Commercial Pulse,” this advanced telematics solution provides customers with “a complete solution for vehicle diagnostics and fleet optimization.”
That sounds great. And given the interest around anything AI-related, as well as how hard-hit MULN stock has been this year, one might think an intraday pop would be in order. Unfortunately, that has not been the case today.
Regardless, let’s dive into what this announcement may mean for Mullen moving forward.
MULN Stock Declines Despite Intriguing Catalyst
Mullen’s launch of its Commercial Pulse fleet telematics solution is certainly intriguing. The ability for commercial customers to track the whereabouts of their fleets and have access to maintenance alerts, alerts tied to driver safety and battery charge and other key metrics is a compelling value-add for buyers. Additionally, Mullen says that this is an AI system solution. So, one ought to expect MULN stock’s price to jump on this news, right?
Well, unless this launch brings about material demand, investors (and the market as a whole) appear to believe this catalyst is just too little, too late. Mullen’s production issues, its balance sheet constraints and the likelihood of future capital raises make MULN difficult to invest in. There are other profitable EV makers out there for investors to focus on. Thus, early-stage EV players like Mullen may simply be ignored — at least until they can show consistent and profitable growth.
I do think this fleet telematics solution is one worth keeping an eye on. There is an outside possibility that the launch could drive some customer demand. We’ll have to see. However, with the jury still out and the market not buying it, MULN stock remains a speculative hot potato that investors are probably best off avoiding for now.
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On the date of publication, Chris MacDonald 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.
