Mullen Automotive’s (NASDAQ:MULN) new 8K filing is providing investors with a painful company update as it highlights the severity of its current state.
The company’s reason for releasing this 8K filing is to detail the substantial risks and uncertainties to shareholders, though it is fair to mention Mullen just announced its first-ever recorded revenue of the year.
Here are just a few of the risks associated with investing in MULN according to the company itself:
- We have incurred significant losses since inception, and we expect that we will continue to incur losses for the foreseeable future;
- We require substantial additional financing to effectuate our business plan;
- We have not yet manufactured or sold any production vehicles to customers and may never develop or manufacture any vehicles;
- Our limited operating history makes it difficult for us to evaluate our future business prospects;
- Our auditor has expressed substantial doubt about our ability to continue as a going concern;
- Certain of our lenders and the Internal Revenue Service have liens on our assets;
- Our stockholders are subject to significant dilution upon the occurrence of certain events which could result in a decrease in our stock price;
- We may not be able to maintain compliance with continued listing requirements of the NASDAQ Capital Market;
- We may not be able to develop, manufacture and obtain regulatory approvals for a car of sufficient quality to appeal to customers on schedule or at all;
- Our currently planned vehicles rely on lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame, potentially subjecting us to litigation, recall, and redesign risks;
- The efficiency of a battery’s use will decline over time, which may negatively influence customers’ decisions whether to purchase an electric vehicle;
- We may not succeed in establishing, maintaining and strengthening our brand;
- We may be subject to damages resulting from trade secrets;
And the list goes on.
MULN stock fell more than -7% on Friday and is currently down more than -98% this year-to-date.
Should Mullen Investors Be Worried?
Like any investment, there is always a risk.
They key is identifying not only what your risk tolerance is but also in creating a risk management system that will allow you to cut the cord when needed.
Individual investors will need to identify what these two scenarios look like for them when looking at their investment portfolio in Mullen Automotive.
It’s easier to see coffee money hit the floor than it is to see life savings plunge from an investment.
If you have been deeply affected by Mullen Automotive’s share price decline, know that this is only one play out of others out there you have yet to find and multiply your money in.
Is rebuilding tough? Absolutely, I’ve been there.
But choosing not to learn from your experiences in the market can make things tougher.
Investing in Mullen Automotive today is highly risky.
While the company has had several positive developments in the works and has even confirmed production next month, it has also now admitted to the possibility of nothing ever really coming to fruition.
Is there any hope for the company? There absolutely could be.
But I’d love to hear your thoughts on the comment section down below.
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