- Shares of Mullen Automotive are down on Friday.
- MULN shares have lost more than -16% since the start of the year.
- Mullen will likely need to continue diluting shareholders in order to continue his goals to increase production.
- Mullen’s management could increase outstanding shares from 1.7 billion to 5 billion.
Mullen Automotive (MULN) had a terrible slide this week. The early January rally has now dissipated and MULN shares are down -16.5% this week alone and -15% for the year. And this despite a year-on-year increase of up to 66.6% at the beginning of the month.
Stock markets rose on Friday, with NASDAQ futures well ahead of other indexes at +0.8%. Meanwhile, MULN shares lost more than 2% to trade as low as $0.264.
Mullen Automotive Stock News
Mullen shareholders and outside traders simply aren’t confident that any investment in Mullen won’t be completely diluted. Based on the filing from Mullen, the 1.7 billion outstanding shares could be pushed up to 5 billion. As recently as 2021, the company had 23.4 million shares outstanding.
Led by CEO David Michery, the EV innovator carries out a number of separate tasks. It is developing commercial production for the Mullen FIVE crossover, which is not likely to be delivered until 2025. It is also preparing its Indiana plant to produce Class 1-6 chassis commercial vehicles with designs obtained from the acquisition of Bollinger Motors. Last fall, it closed the acquisition of Electric Last Mile Solutions for more than $100 million.
Investments are extremely expensive in the automotive industry. Competitive EV start Rivian (RIVN) it has a lot of trouble ramping up production right now, but it has at least $13 billion on its balance sheet. Mullen, on the other hand, only has somewhere around $50 million in unrestricted cash, probably much less.
Still, Mullen Automotive remains one of the most talked about supplies on retail forums and fans are hoping he can pull off such a miracle Tesla (TSLA) has done over the past decade.
Mullen Automotive Stock Forecast
Traders who have been paying attention in the past week are probably already out of the market, waiting for a reentry, if anything. When MULN shares fell below the $0.33 resistance/support level, the 9-day moving average and the 21-day moving average on the same day, watchful traders new, it’s time to cut losses. From there, Mullen shares will retest either the $0.21 or $0.18 price levels. Some bulls are likely to re-enter these support levels to attempt another rally at this point.
Daily chart of MULN