MULN stock came down -8.59% last Friday after a bullish start to the new year and continued to drop after hours another -16.11%.
On Wednesday, the stock came down more than -6%.
Share prices went up to $0.47 from $0.28 in the past two weeks.
Volume surged as investors began to buy the stock based on expert predictions for the year.
MULN stock closed at $0.35 on Friday with around 167.7 million in trading volume, nearly the same volume as on Wednesday.
Total call options continue to dominate total put options volume.
So, why is MULN stock going dropping?
Let’s discuss it below.
MULN Call vs Put Options
The market sentiment for MULN stock continues to stay bullish despite the current share price levels we’re seeing today.
There was a total of 33.23K call options and 2.14K put options for MULN.
Webull’s options volume distribution shows us more investors are betting on MULN stock to go up.
The overwhelming number of calls we’re seeing in the market compared to puts is a trend that’s been ongoing for weeks now.
Despite shares falling going into the weekend, we can see the market sentiment for Mullen Automotive is quite bullish based on the options volume.
Last Friday, call options volume went as high as 194K.
That same day, put options weighed in lightly at 12.7K compared to the latter.
Also read: Will MULN Shares Keep Surging?
As more liquidity enters the market, I expect the number of call and buy orders in MULN stock will increase.
Mullen Automotive had a market capitalization of $437.7 million at the end of December 2022 and increased to $524.9 million in only the second trading day of the new year.
Today, MULN’s market cap is sitting at $467 million but reached nearly $700 million earlier last week.
MULN Stock Selloff Contributes to This Week’s Tumble
MULN stock had a selloff this Friday after it peaked last Friday around $0.47 per share.
However, $0.35 seems to be a strong level of support for Mullen Automotive.
Below that level is $0.28, where the stock is currently trading.
A big selloff has the potential to break consolidation causing shares to slide greatly.
On the contrary, big buying pressure will send shares to retest $0.47.
If the price is able to break above $0.50, shareholders can expect to see further bullish momentum.
Technical analysis shows us rejection at $0.47-$0.50 could send MULN stock to retest $0.30 or lower.
Which is exactly what happened on Friday’s trading day and on Wednesday of this week.
Friday saw significantly less volume than it did its previous week, so we know big volume is contributing to the rise of the price.
Two weeks ago, we saw 522 million in trading volume while last Friday we only saw 167 million in trading volume.
MULN has an average trading volume of 230 million.
The conservative buying volume in the past few days may have also contributed to the tumble.
MULN Stock 10-K and Reverse Stock Split News
Mullen submitted its Form 10-K on Friday the 13th, revealing a number of risk factors.
For the full year ended Sept. 30, 2022, Mullen — which posted no revenue — spent $21.65 million on research and development and $75.3 million on general and administrative expenses, totaling a loss from operations of just under $97 million. This compares unfavorably to the year-ago loss of $22.4 million.
Further down the statement, the net loss for the most recent fiscal year came out to $740.3 million. Again, this tally contrasted unfavorably with the year-ago’s net loss of $44.2 million.
As Mullen’s own Form 10-K stated, it must raise cash, likely through additional debt or equity financings. Fundamentally, the core concern for stakeholders is dilution, posing major worries for MULN stock.
A MULN reverse stock split is also on the table, which has contributed to the selloff we’re currently seeing today.
Shareholders will get to vote on passing this or not, but I’m curious to know your thoughts on this news below.
Will MULN Shares Go Up Again?
MULN stock will need more liquidity for share prices to continue rising.
Shareholders will need to keep an eye on the company’s market capitalization.
Mullen Automotive’s market cap should be steadily increasing for share prices to increase.
A decline in market cap suggests big institutions or insiders may be selling, a sign that more often times than not suggests shareholders do the same.
Mullen Automotive had other great news in its industry towards the end of 2022.
So, the company as an entirety still has potential for a promising future.
They’ll just have to deliver as a company.
But it will be investors who provide the company with liquidity that will ultimately drive share prices up.
For more MULN stock news and updates, join the newsletter to receive weekly market news and notifications straight to your inbox.
You can also join our limited and private Discord community here.