Mullen Automotive’s (NASDAQ:MULN) short interest and Cost to Borrow (CTB) surged to new highs on Tuesday.
Ortex is reporting the company’s live short interest at a whopping 48.34% and Max CTB at 269.41.
Mullen’s CTB, or Cost to Borrow is the fee hedge funds are paying to short the stock.
The big surge in short interest indicates strong bearish conviction from hedge funds seeking to bankrupt the company or delist it from the market.
If successful, the short sellers won’t have to pay any taxes on their capital gains, kinda jacked if you ask me.
Despite several positive developments, Mullen Automotive has been a target for short sellers, and unfortunately, dilution has only made things tougher for long-term investors.
“We’re not a company that is going out of business unlike everything I read and see out there. This is a company that’s the complete opposite,” says Mullen CEO David Michery.
However, shares have fallen to $0.16 only a month after the company issued a 1-for-25 reverse stock split.
The company even introduced a max ratio of 1-for-100 reverse stock split in an updated SEC filing to curve the massive short selling and buy the company more time.
Mullen Automotive will need to get vehicles out on the road and sell in volume if it’s to win over Wall Street.
The Mullen Three is finally scheduled to begin production in July, so hopefully the company sees some breathing room with its stock.
Mullen’s high short interest is not a good sign for the company fundamentally, but it does mean that big news has the potential to cause big buying pressure and in turn squeeze short sellers from their positions.
Will MULN Survive?
Despite falling share prices, Mullen Automotive has stated that they will be hiring 35 new staff members to begin production in July at its Tunica, Mississippi, assembly facility for its Mullen Three EV.
Investors want to see a massive buy-back from the company to instill buyers’ confidence.
Although unattractive to the average investor, another reverse stock split will keep Mullen Automotive afloat, even if investor confidence gets chipped at once again.
The company has been criticized by fans and investors for being ‘all talk and no action’.
Is it possible that the automotive company went public too fast?
Mullen Automotive is definitely a cool company with rather great looking cars, but the fact is that real people are getting hurt for supporting the company.
And in the end, what’s holding Mullen Automotive together at the moment is its shareholders.
Dilution has been a crowdsourcing strategy since the company essentially has no revenue.
Latest Mullen Automotive News
Mullen Automotive has launched new AI tech across all EV lineups according to the company’s latest press release.
The new AI technology will be able to recognize faces and bridge the gap between driver and vehicle by personalizing the vehicle experience.
Mullen says the integration of AI-powered PERSONA vehicle technology will go into all of its commercial and consumer vehicle lineups.
PERSONA, originally developed for the Mullen FIVE, is an advanced interactive AI camera/sensor and video monitoring system that utilizes facial recognition technology to unlock/lock vehicles and completely personalize the overall vehicle experience for the driver.
In addition to unlocking the vehicle and customizing driver-specific vehicle settings, initial PERSONA functionality will also include Security Fence, Pet and Occupant Safe Mode, Advanced Vehicle Charging, and AI-Powered Emergency Response.
“PERSONA was first consumer tested on the Mullen FIVE EV Crossover during the 2022 “Strikingly Different” U.S. Tour.
Firsthand feedback received and survey data from the tour were extremely positive, with a majority of the participants indicating that PERSONA was a unique technology and concept they could see themselves using.”
This technology certainly makes Mullen Automotive stand out from other EV competitors.
The problem with Wall Street is that they want to see units on the road as well as sales volume to turn the company’s stock price around.
Today MULN stock fell nearly -30%.
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