Yesterday, Mullen Automotive (NASDAQ:MULN) finished trading at less than $1 per share at close of markets. Many stocks took significant losses that day but for Mullen, this type of performance is particularly concerning. As InvestorPlace‘s Eddie Pan reports, if MULN stock fails to break the $1 mark for 30 consecutive days, it will receive a delisting notice from the Nasdaq. So far, the electric vehicle (EV) producer has managed to keep its spot on the exchange. But now its future looks increasingly uncertain. And although Mullen is back in the green today on an update from chairman and CEO David Michery, it still isn’t back into the same zone.
Should investors be concerned about Mullen if it fails to meet the Nasdaq’s listing requirements? The answer is a definite yes. But let’s take a closer look at the company’s problems and assess what they mean for its immediate future.
What’s Happening With MULN Stock
While Mullen closed out today in the green and is still green in after-hours trading, it is still far from the $1 mark. As of this writing, MULN stock closed at 81 cents per share despite rising more than 5% today. Shares are still down over 35% for the week, but even more concerning is that they have plunged 64% over the past month.
Following yesterday’s performance, Michery issued a statement on Mullen’s plans for the immediate future. While he acknowledged that his company is facing undeniable economic headwinds, Michery adds that “our balance sheet remains strong, and we have achieved meaningful accomplishments since our last update to shareholders in June 2024.” He also highlights what he sees as Mullen’s financial growth resources and ways of both expanding its sales and reaching new customers.
Michery’s outlook is upbeat, but that doesn’t mean Mullen’s growth prospects are. The fact that his statement hasn’t helped push MULN stock back to $1 per share should be seen as a testament to the company’s significant problems. InvestorPlace contributor Joel Lim recently discussed the problems with Mullen’s balance sheet, stating:
“Mullen’s financial metrics are as poor as they can be, and its latest quarterly report is evidence of this. According to the report, Mullen’s equity fell from $272.8 million to $117.4 million in six months. It also spent $120.9 million cash in operations, way more than the $16.3 million it generated from EV sales.”
A CEO can claim that a company is doing fine but when the stock’s performance tells a different story, investors should approach with caution.
Why It Matters
This past year has shown just how unstable of an investment MULN stock truly is. Since 2024 began, shares have fallen roughly 94%, plunging from their peak of $14 to less than $1. Now, Mullen is in grave danger of losing its spot on the Nasdaq. If the stock moves to trading over the counter (OTC), it will likely mark the beginning of the end for the former meme stock. Recent plans to resell 85 million shares haven’t helped the stock recover, nor has Michery’s case for why investors should be optimistic. All this suggests that Mullen is still in a race to the bottom, one that will likely end with it being delisted.
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On the date of publication, Samuel O’Brient 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.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
