Mullen Automotive’s (NASDAQ:MULN) short interest is now setting a new high record as it passes May’s previous high of 24.46%.
Ortex is reporting a high short interest of 25.45%, which is higher than AMC Entertainment’s or GameStop’s current short interest percentage.
Market analyst and portfolio manager of the Omnia Portfolio, Tom Yeung says this catalyst is the same that drove short squeezes in AMC and GameStop.
“Mullen’s recent short-share order imbalance should have short sellers worried.
We’ve seen this story before in other meme stocks.
And the most dangerous thing to assume is that this time is any different,” says Yeung.
“Mullen has a hyperactive options ring that can contribute to a gamma squeeze.
Speculators buying call options generally cause market makers to buy an offsetting leveraged long position in the stock, which means every $1.00 invested in options is much like buying $10 of shares.That means a short squeeze in Mullen could send shares up anywhere from the $2 range to the $5 range, depending on how many retail investors suddenly hop on board and assuming a squeeze happens in the first place.”
AMC stock rose more than 3,000% when shares rose to their all-time high of $72.
Short interest at the time had dropped from 22% to 14% as share prices soared.
Today, high volume in Mullen Automotive stock has shares rising exponentially.
Shares of the company have surge more than +70% in the past week.
The question is will Mullen Automotive be able to maintain this momentum before it gets shorted back down?
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Mullen Vows to Investigate Illegal ‘Naked Short Selling’
Mullen’s price has been hammered all year from what shareholders and the company believe to be a result of illegal ‘naked short selling’.
Mullen Automotive has provided shareholders with a new update on its illegal naked shorting investigation.
The company announced on Wednesday that it has retained Christian Attar, formally known as Christian Levine Law Group, and in partnership with Warshaw, Burstein, LLP, to combat naked short selling activities.
“Based on reports Mullen has received from ShareIntel, the Company believes it may have been the target of a market manipulation scheme involving illegal naked short selling of its common stock and has decided to investigate and expose any potential wrongdoing.
According to various publicly disclosed sources, Christian Attar, formally known as Christine Levine Law Group, in partnership with Warshaw Burstein, LLP, have successfully prosecuted and collected millions of dollars in aggregate damages on behalf of their clients from broker-dealers, market-makers, hedge funds, and asset-based lenders who have engaged in such market manipulation schemes,” read the official statement.
“Since our announcement on April 28, we have been actively investigating naked short selling and we now have enough intel to have the law firm actively investigate and, where justified, take action against any market manipulators using naked short selling, spoofing or other illegal acts,” stated David Michery, CEO and chairman of Mullen Automotive, Inc.
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