An electric car charging in California
The MULN stock price has made a strong recovery in the past few days. Mullen Automotive share price jumped to a high of $0.5121, which was slightly below last week’s high of $0.6116. It has risen by more than 150% from its lowest level in October, giving it a market cap to more than $263 million. Mullen has outperformed other EV stocks like Tesla, XPeng, Li Auto, and Nio.
Mullen Automotive is a highly acquisitive electric car company that has become popular among retail traders. Its popularity increased after Hindenberg Research published a scathing report on the company. It accused the company of deceiving investors and overstating its claims about its solid-state batteries.
Mullen Automotive has been in an acquisitive mode in the past few months. In October, the company acquired Electric Last Mile Solutions, a bankrupt EV company, for over $240 million. This happened a month after the company acquired a 60% stake in Bollinger Motors. ELMS filed for bankruptcy a few months ago.
In all, Mullen Automotive and its newly acquired companies have not sold cars and are instead spending money building their products. The most recent MULN stock price rally happened as investors cheered the company’s exclusive distribution rights for its I-GO EV in the European market.
Still, Mullen Automotive remains in trouble. Existing shareholders will continue being diluted as the company spends more money on acquisitions and developments. Mullen ended last quarter with over $60 million in cash. Of course, it has tapped into these funds to fund its recent acquisitions.
Meanwhile, Mullen Automotive short interest is rising. Data shows that its short interest has risen to 17.98% in the past few weeks. This is a bit better than that of other fledgling EV companies like Faraday Future, Lordstown Motors, and Workhorse Group.
The two-hour chart shows that the MULN share price has made a strong recovery in the past few days. Last week, the shares made an up-gap after the I-GO EV deal. A closer look at the chart shows that the average volume for the shares has dropped sharply in the past fewdays. At the same time, the Relative Strength Index (RSI) has moved slightly below the overbought level.
Therefore, Mullen will likely pullback in the coming days. If this happens, the next key support level to watch will be at $0.35. A move above the resistance at $0.57 will invalidate the bearish view.
This post was last modified on Oct 31, 2022, 08:08 GMT 08:08