By 
Mullen Automotive’s stock price has been in a steep decline, reflecting ongoing concerns about the company. The stock recently dropped to a low of $0.2804, its lowest level since October 19, and has fallen by more than 98% from its peak in 2021. This trend mirrors the struggles of other SPAC EV companies like Canoo, Faraday Future, and Lordstown Motors.
Mullen Automotive is currently facing significant challenges, with its short interest remaining high. About 18% of its shares are held by short-sellers who anticipate further declines. Additionally, the company has been diluting its shareholders, with the total number of outstanding shares now exceeding 0.377 billion.
The company has used funds from share sales to acquire other EV companies, including Electric Last Mile Manufacturing and Bollinger Motors, with several other acquisitions announced earlier. However, I believe that growth through acquisition is generally not a sound strategy. Acquiring multiple companies often leads to a clash of cultures, which can be difficult to manage. For instance, Salesforce has underperformed compared to other tech stocks due to its aggressive acquisition strategy. Moreover, Mullen has acquired some companies with troubled histories.
Another issue for Mullen is the likelihood of continued shareholder dilution as it ramps up production in the coming years. On the upside, the company has eliminated $13 million of debt, with $10 million remaining. This could allow Mullen to avoid further dilution by using debt financing instead.
The daily chart shows that Mullen’s stock price has been in a strong bearish trend over the past few months, now hovering just above its lowest level this year. The stock is trading below all moving averages, and the Relative Strength Index (RSI) has fallen below 50. The ongoing sell-off is also supported by the Supertrend indicator.
Given these factors, the MULN stock price will likely continue to decline, with sellers targeting the next key support level at $0.15. However, short-sellers should be cautious of the risks associated with shorting a meme stock, as a short squeeze remains a possibility.