Mullen Automotive (NASDAQ:MULN) announced on Wednesday that it will go through a 1-25 reverse stock split, effective Thursday May 4th.
MULN stock fell more than -21% following the announcement.
At the same time, the company announced big EV updates as well as a new $263 million purchase order from Randy Marion Automotive Group.
But even that wasn’t enough to keep shares from falling on Wednesday.
Mullen’s new 1-for-25 reverse stock split means shareholders will see less shares in the brokerage account at a higher price per share.
For every 25 shares that a shareholder owns, they will be converted to 1 share.
For example, an investor holding 100 shares of MULN stock at $0.06 will now hold 4 shares of MULN stock valued at $1.50 post a reverse stock split.
Shareholders were hoping Mullen Automotive stock would organically meet the Nasdaq requirement with a reverse stock split being the last resort.
The best scenario that can happen moving forward is big companies stepping in to buy Mullen at its dollar price, with the worst case being the stock getting shorted back to pre-split levels.
Announcement from the Company (Mullen Automotive)
“Mullen’s Common Stock will continue to trade on The Nasdaq Capital Market (“Nasdaq”) under the existing symbol “MULN” and will begin trading on a split-adjusted basis when the market opens on May 4, 2023.
The Reverse Stock Split is primarily intended to bring the Company into compliance with the $1.00 minimum bid price requirement for maintaining its listing on Nasdaq.
There is no guarantee the Company will meet the minimum bid price requirement.
At the Company’s reconvened Special Meeting of Stockholders held on January 19, 2023, the Company’s stockholders approved a proposal to authorize a reverse stock split of the Company’s Common Stock, at a ratio within the range of 1-for-2 to 1-for-25.
The Company’s board of directors approved a 1-for-25 reverse split ratio, and on May 3, 2023, the Company filed a Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation to effect the Reverse Stock Split effective May 4, 2023.
The 1-for-25 reverse stock split will automatically combine and convert 25 current shares of the Company’s Common Stock into one issued and outstanding share of Common Stock.
No fractional shares will be issued in connection with the Reverse Stock Split.
All fractional shares will be rounded up to the nearest whole share.”
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Hi Frank, can you post a article on what options and if the ftd’s have to cover and if Mullen shareholders should seek legal counsel?
Leave your thoughts below.