- Mullen Automotive stock is losing value on Friday.
- MULN stock has lost more than -16% YTD.
- To continue its production ramp up goals, Mullen will probably need to keep diluting shareholders.
- Mullen management could boost oustanding shares from 1.7 billion to 5 billion.
Mullen Automotive (MULN) has experienced an awful slide this week. Early January’s rally has now dissipated, and MULN stock is down -16.5% this week alone and -15% for the year. This is despite rising as much as 66.6% year to date early in the month.
Equity markets have risen on Friday, and NASDAQ futures are well of ahead of other indices at +0.8%. Meanwhile, MULN stock has lost more than 2% to trade as low as $0.264.
Mullen Automotive stock news
Mullen shareholders and outside traders are just not certain any investment in Mullen will not be completely diluted. Based on filings from Mullen, the 1.7 billion in shares oustanding could be pushed as high as 5 billion. Back in 2021 the company had 23.4 million shares oustanding.
The EV upstart, helmed by CEO David Michery, is undertaking a number of separate tasks. It is developing commercial production for the Mullen FIVE crossover, which will likely not be delivered until 2025. It is also preparing its Indiana factory to build class 1-6 chassis commercial delivery vehicles with designs obtained from its acquisition of Bollinger Motors. Last fall it closed on a $100 million+ acquisition of Electric Last Mile Solutions.
Capex is extremely expensive in the automotive business. Rival EV startup Rivian (RIVN) has many problems ramping up production at the moment but at least has $13 billion on its balance sheet. Mullen on the other hand only has somewhere around $50 million of unrestricted cash, probably much less.
Yet Mullen Automotive remains one of the most talked about stocks on retail trader forums, and fans hope it can perform the kind of miracle that Tesla (TSLA) did over the past decade.
Mullen Automotive stock forecast
Traders paying attention over the past week are probably already out of the market and waiting for a reentry if anything. When MULN stock dropped below the $0.33 resistance/support level, the 9-day moving average and the 21-day moving average all on the same day, observant traders new it was time to cut losses. From here Mullen stock will retest either the $0.21 or $0.18 price levels. Some bulls will likely reenter at those support levels to attempt another rally at that point.
MULN daily chart
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.