- Mullen Automotive stock is still reeling from October 19 announcement that it seeks to perform a reverse stock split in December.
- Mullen updates lawsuit against TD Ameritrade, Charles Schwab and National Finance Services.
- New York Judge says Mullen needs to file an amended complaint by November 30.
- Mullen will seek to give investors between two and 100 shares for each current MULN share.
- NASDAQ delisting saga has still not been decided as CEO Michery hopes to resolve issue by pushing MULN above $1 per share.
Mullen Automotive (MULN), the electric vehicle (EV) penny stock, is holding onto its attempted recovery on Tuesday. At the time of writing, MULN stock is up more than 24% near $0.278. The stock had earlier in the session rallied up 35%. The Dow Jones, NASDAQ Composite and S&P 500 indices have retreated from their highs but are maintaining their hold on positive territory ahead of many large-caps posting earnings results after the close. These include Microsoft (MSFT) and Alphabet (GOOGL) and are likely to sway the entire post-market.
The beloved underdog of retail investors has been seeking to resolve issues with stock brokers it blames for manipulating its stock price, and a New York judge issued a ruling on Monday saying the company must update its complaint by the end of the month.
Mullen stock news: Judge Analisa Torres is back in the news
The United States District Court of the Southern District of New York has advised Mullen’s legal delegation that it needs to update its complaint by November 30. Mullen is suing TD Ameritrade, Charles Schwab, National Finance Services and others with the intent of exposing these brokers for manipulating the MULN stock price via allowing naked shorting and other illegal activities.
Judge Analisa Torres, who is well known for providing Ripple (XRP) with a partial victory in its case against the Securities & Exchange Commission (SEC), is presiding over Mullen’s lawsuit and has ordered both parties to jointly file their case management plan by December 15.
“We are aggressively pursuing all remedies available to us to protect the company and our shareholders,” said David Michery, CEO and chairman of Mullen Automotive, in a statement on Monday.
Mullen has retained the Warshaw Burstein and the Christian Attar law firms to represent it. In Mullen’s statement, Warshaw attorney Alan Pollack commented, “This case raises certain unique legal issues concerning how broker-dealers manipulate the marketplace and how such manipulation impacts retail investors. Counsel will diligently work to expose defendants’ wrongdoing in order to protect the rights of Mullen and its shareholders.”
Third reverse stock split of the year startles investors
Mullen’s stock price dove more than 22% last Thursday, October 19, after the company announced it will seek a third reverse stock split in December. This action may be necessary in order to raise the MULN share price above $1.
The $1 share price is required by NASDAQ to remain listed. Back in September, Mullen received notice that their stock was in danger of being delisted. Mullen executives appealed the decision, and a NASDAQ committee is still in talks about whether to permit Mullen more time to achieve the $1 threshold.
Last Thursday, Mullen announced it will hold a special shareholder meeting on December 15 to effect a reverse split between 1-for-2 to 1-for-100. This news follows reverse splits in May and August of this year that were unable to keep the stock price above $1. Shareholders have already had their nominal number of owned shares cut to one MULN share for every 225 they previously owned at the beginning of 2023. December’s reverse split will attempt to push this number up to over 1-for-1,000 shares for the full year.
EV stocks FAQs
Electric vehicles or EVs are automobiles that use rechargable batteries and electric motors to accelerate rather than internal combustion engines (ICEs). They have been around for more that 100 years, but battery technology research & development was meager for much of the 20th century. Lithium-ion battery technology became advanced enough to produce EVs at scale in the late 1990s and 2000s, and sales have been steadily increasing since then Tesla’s Roadster was unveiled in 2008. EVs are viewed as a means of reducing carbon emissions since battery electric vehicles (BEVs) themselves produce zero emissions. Other vehicles called plug-in hybrid electric vehicles (PHEVs) utilize both battery electric power and ICEs as a backup.
EVs are growing from a small base, but they rose from 9% of global new auto sales in 2021 to 14% of the total in 2022. This was a 65% YoY growth rate, and the industry delivered 10.2 million EVs worldwide in 2022. Projections show this number climbing above 16 million in 2023. Across the world, market shares differ greatly among nations. Nearly 88% of Norwegian new car sales in 2022 were EVs. On the other hand, the United States, where much of the modern innovation in EVs was forged, had less than 8% of new vehicle sales go to EVs in 2022. The largest EV market in the world, China, saw 30% of the market go to EVs that year.
We know you’re thinking Elon Musk, but he’s probably more like the father of the mass-market, contemporary EV. All the way back in 1827, a Hungarian priest named Anyos Jedlik invented the electric motor and used it the following year to power a vehicle of sorts. French scientist Gaston Planté invented the lead-acid battery in 1859, and German engineer Andreas Flocken built the first true electric car for the public in 1888. EVs made up about 38% of all vehicles sold in the US around 1900. They began losing market share rapidly after 1910 when gasoline-powered vehicles grew much more affordable. They largely died off until new research programs in the 1990s led to gradual private sector investment in the 2000s.
China’s BYD is by far the largest manufacturer of EVs in the world. In 2022 it sold 1.8 million EVs and in the second half of the year made up 20% of the global market. The asterisk given to BYD is that the vast majority of these vehicles are hybrids. Tesla’s 12% market share is often treated as more significant than BYD, because it only sells BEVs and is the most famous EV brand in the world. Volkswagen, BMW and Wuling then round out the top five. As a new sector with heavy investment though, many startups have flooded the market. These include China’s Nio, Li Auto and Xpeng; a Swedish-Chinese manufacturer called Polestar; and Lucid and Rivian from the US.
Mullen stock forecast
Mullen’s stock price spiked on Tuesday, rising over 35% at one point, but has since fallen mid-session. The large-scale rally failed to even reach the 9-day Simple Moving Average (SMA), however. After dropping below the $0.39 support level on October 16, the $0.39 threshold now becomes the primary objective of bulls to regain. Importantly, it is also nearly in line with the 21-day SMA, making that level even more significant.
Despite recent company production goals being met for its Class One and Class Three commercial vehicles, investors remain worried about continued reverse splits.
MULN daily stock chart
