Mullen Automotive, Inc. (NASDAQ: MULN), an emerging electric vehicle (EV) manufacturer, is once again under the spotlight as investors grow increasingly wary of another potential stock dilution.

With MULN stock currently trading at $11.22 (post several reverse splits), down significantly from its 52-week high, shareholders are voicing concerns over the company’s financial maneuvers and their impact on stock value.

The fear of dilution, a recurring issue for Mullen, stems from its history of issuing new shares and warrants to raise capital, which has repeatedly eroded shareholder value.

A History of Dilution and Declining Share Value

Mullen Automotive has faced significant challenges in maintaining its stock price, with a staggering 100% decline since early 2020.

The company’s frequent reliance on issuing new shares and convertible securities to fund its operations has been a persistent source of frustration for investors.

For instance, in June 2023, Mullen filed with the SEC to issue 19.5 million shares and warrants for an additional 8 million shares to Acuitas Capital, a move that could have diluted outstanding shares by approximately 36%.

More recently, a prospectus supplement filed in October 2023 disclosed the resale of up to 103 million shares by four selling stockholders, further fueling dilution concerns.

The company’s financial position adds to these worries.

As of March 31, 2025, Mullen reported a cash position of just $2.3 million and a negative working capital of $156.1 million.

With cash burn reduced by 56.6% to $52.4 million in the first half of fiscal 2025, compared to $120.9 million the previous year, Mullen still faces significant capital needs to sustain its ambitious EV production plans.

Posts on X and forums have highlighted investor skepticism, with one user noting that Mullen’s cash reserves dropped from $81.5 million to under $1.4 million, coupled with over $50 million in unpaid debts, raising doubts about the company’s ability to avoid further share issuances.

“They will dilute immediately. So many people lost money on this stock over the years.

2 or 3 reverse splits this year…how is that allowed?,” says an investor.

“The Mullen RS (reverse split) [referring to the Mullen Five RS electric vehicle],” said another user.

Recent Developments: Progress Amid Financial Strain

Despite these financial challenges, Mullen has made notable strides in its EV operations, which the company touts as steps toward a sustainable future in the commercial EV market.

In April 2025, Mullen announced a 20-unit order for its all-electric Class 3 Mullen THREE trucks from Houston-based logistics company Cashflow on Wheels, valued at approximately $1.5 million.

These vehicles are set to be delivered for FedEx routes in Texas and Georgia, marking a significant step in Mullen’s commercial EV expansion.

Additionally, Mullen’s majority-owned subsidiary, Bollinger Motors, delivered its first 2025 Bollinger B4 electric truck to EnviroCharge for conversion into a mobile Level 3 charging unit, with a reveal planned at the ACT Expo on April 28, 2025.

Bollinger also delivered a B4 Class 4 commercial vehicle to the Lower East Side Ecology Center in New York, reinforcing Mullen’s focus on sustainable transportation solutions.

On the technological front, Mullen has partnered with Faissner Petermeier Fahrzeugtechnik AG (FPF) in Germany to launch its ultra-high-performance FIVE RS EV Crossover by December 2025, with plans to expand to other EU countries, the UAE, and South Africa in 2026.

The vehicle boasts over 1,100 horsepower and a top speed exceeding 200 mph, positioning Mullen as a competitor in the high-performance EV market.

Furthermore, Mullen reached a settlement with GEM Group on May 9, 2025, resolving a four-year litigation and potentially freeing up resources for its EV projects.

Market Manipulation Allegations and Legal Battles

Adding to investor unease, Mullen has been vocal about alleged market manipulation affecting its stock price.

In March 2025, a federal court ruled that Mullen could proceed with discovery against broker-dealers and market makers accused of depressing the stock price through false sale orders, following claims of naked short selling.

The company has also filed complaints against major financial institutions like UBS Securities and IMC Financial Markets, alleging spoofing activities that artificially deflated MULN’s price between November 2021 and November 2023.

These legal efforts reflect Mullen’s attempt to address external pressures on its stock, but they have yet to translate into sustained price stability.

Also Read: A New System Meant To Detect Illegal Short Selling Now Uncovers Two Cases

Reverse Stock Splits and Nasdaq Compliance

Mullen’s history of reverse stock splits—five in the past three years—has further eroded investor confidence.

The most recent, a 1-for-100 reverse split effective June 2, 2025, was implemented to maintain Nasdaq’s minimum $1.00 bid price requirement.

However, the stock has continued to slide, dropping 95% since the last split, from $11.05 to $0.40 in some periods, before rebounding to its current $12.26.

Posts on X suggest that short interest, currently at 26.92%, and alleged naked shorting continue to weigh heavily on the stock, with some investors questioning whether these forces are “trying to get rid of the company.”

Also Read: Reuters Strategist Says Hedge Funds Are At Risk of Short Squeezes From Retail Investors

Outlook: High Risk, Uncertain Reward

Despite Mullen’s operational progress, the specter of dilution looms large.

Analysts remain cautious, with no buy recommendations and some labeling MULN as a “hold” due to its high volatility and financial risks.

The company’s market capitalization stands at a modest $3.65 million, reflecting its penny stock status, and its negative earnings per share of $48,923.60 in the last quarter underscores its ongoing unprofitability.

For investors, the question remains whether Mullen’s advancements in EV production and partnerships can outweigh the persistent threat of dilution and financial instability.

While the company’s focus on Class 1-3 commercial EVs and high-performance crossovers shows promise, the need for substantial capital to scale operations suggests more share issuances may be inevitable.

As Mullen navigates these challenges, investors are left to weigh the potential rewards against the significant risks of holding MULN stock.

But I’m curious to know what you think — leave your thoughts below.

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