81% of Mullen Automotive (NASDAQ:MULN) trading is now happening in dark pools, or off exchanges according to the latest dark pool statistics data.
Shares of the automotive company have plummeted below a quarter now, currently down more than -45% this trading week alone.
On Friday, volume surge to more than 280 million, up significantly from its average trading volume of only 26 million.
Chart Exchange reports as high as 81% of MULN began trading in dark pools early in June.
Off exchange trading has leveled between the high 60% and low 70% marks.
The high dark pool volume suggests that Mullen Automotive’s real retail demand is not being reflected on the lit exchange.
Roughly only 20%-45% of retail purchasing power is contributing to Mullen’s share price; a rather unjustifiable number figure for a company that is still working on building momentum.
Mullen Automotive has become a big target for short sellers which has led to the company having to issue a 1-for-25 reverse stock split.
Since the company stock has once again fallen below Nasdaq’s $1 bid requirement, the company has proposed another reverse stock split for this year’s annual shareholder meeting taking place in August.
Also Read: Mullen CEO Addresses Big Share Price Plunge in New Interview
Dark Pool Trading Has Risen Under Gensler’s Watch
Dark pool trading has risen substantially since Gary Gensler was appointed Chair of the Securities and Exchange Commission (SEC) in April of 2021 by President Joe Biden.
Gary Gensler announced exclusively on Bloomberg that 90-95% of retail orders don’t go through the lit exchange.
The SEC Commissioner says these orders are rerouted to dark pools rather than the NYSE.
What are dark pools?
Dark pools are privately organized platforms, also known to be an alternative trading system accessible to only institutions.
SEC Chairman and Commissioner Gary Gensler says payment for order flow is partly the reason why orders aren’t processed on the lit exchange.
He says retail orders go to wholesalers on an order-by-order competition.
Citadel’s Ken Griffin has praised PFOF stating it’s good for retail investors; however, in 2004 Citadel stated payment for order flow “creates conflicts of interest and should be banned”, according to an SEC file.
PFOF allows market makers to process retails orders in the ‘dark markets’, or dark pools, per SEC Chairman Gary Gensler.
Banning PFOF is one thing but what about retail demand that has been masked by dark pools?
The SEC actually has the power to ban dark pool trading.
Why dark pool trading has risen since Gary Gensler took office is something the retail community is trying to comprehend.
Read: Mullen Introduces New Dilution Proposals for Later This Year
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