MULN Stock: A Worthwhile Risky Bet

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MULN stock - Mullen Automotive Is a Worthwhile Risky Bet

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Mullen Automotive, Inc. (NASDAQ:MULN) is a development stage company. The firm primarily manufactures and distributes electric vehicles (EVs) in the United States (US). It also owns a digital platform, CarHub that facilitates interactive solutions to a consumer for making decisions to buy or sell a car. Other than this, MULN battery is for EVs and emergency point-of-care solutions.

The company got listed in NASDAQ in November 2021 and has been on a downward spiral since then. MULN stock is down 72%. The short seller, Hindenburg Research accused the company for misrepresenting its test results for solid state batteries. The activist also noted that R & D investment figures in solid-state batteries are significantly lower than what other players have already spent.

However, Tom Gage, CEO of the company that performed tests clarified that he believes Mullen did not misrepresent the battery test results.

Investment in this already beaten down stock can be considered due to the following reasons.

The short ratio on the MULN stock is 11.82% as of March 30, 2022. This is high. As short sellers buy the stock to square the position, it can spur the stock price.

The company’s recent announcement to start testing its solid-state polymer batteries with the Battery Innovation Center (BIC) in Indiana reflects optimism. BIC is known for development, testing and commercialization of safe and reliable energy storage systems for defense and commercial customers.

Management expects to share the outcome in early May 2022. Any positive development can catapult the stock to new highs. It can also facilitate higher acceptance of electric vehicles. Solid-state batteries offer several advantages over the traditional lithium-ion batteries such as being more reliable, safer and faster charging time.

The company is growing rapidly. The firm is developing Mullen FIVE, its mid-sized full-electric sport utility vehicle (SUV). The company has already filed for over 120 patents in 24 countries related to the Mullen FIVE.

It is also developing Mullen DragonFLY, which is an electric high-performance sports car.

Its Mullen ONE, electric vans are scheduled to be launched in Q2 2022. Success of this vehicle shall be the positive catalyst for the stock going forward.

Further, its series of strategic partnerships with hofer for EV powertrain, Comau for engineering, ARRK for manufacturing, Dürr for vehicle production, and DSA Systems for Over the Air (OTA) and vehicle system diagnostics shall enable launch of new EVs with best technology in a least amount of time.

At the end of Q2 ‘22, Mullen reported over $65 million in cash and cash equivalents which is adequate. Higher cash flow will allow the company to carry out its business plans.

On the date of publication, Sakshi Agarwalla 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.

Sakshi Agarwalla has more than eight years of experience writing equity research reports and preparing financial models for companies across various industries, as well as writing newsletters and financial articles. Recently, she assisted her Fund manager in executing trades, preparing weekly, monthly NAVs and writing newsletters. She has a postgraduate degree in finance and has completed CFA.

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