Sign InMullen Automotive Inc.'s Stock Faces Significant Pressure Due to Negative Trends and Nasdaq Compliance Requirements
Summary
As of August 22, 2023, Mullen Automotive Inc.'s stock (MULN) closed at $0.476, experiencing a significant decline and falling below key moving averages, indicating high levels of risk and uncertainty in the market, making it a 'Sell' rating.
Technical Analysis
As of August 22, 2023, Mullen Automotive Inc.'s (MULN) shares closed at $0.476 due to a negative change of $0.15 (-23.36%) from the previous market day. This change led the stock to hit its day's low and high at $0.4701 and $0.6, respectively. Despite the volatility, MULN's stock had fallen significantly below its 200 Day Moving Average of $3.73 and moderately below its 50 Day Moving Average of $0.27.
The current relative strength index (RSI14) stands at 18, reflecting an oversold and potentially undervalued condition of the stock. This condition is further supported by a negative 3-month MACD of -0.151523, indicating recent bearish momentum pushing the stock lower.
The stock has seen a sharp decline in price from its year-high of $19.75 to its present levels, significantly under the yearly low of $0.1. The lack of identified support or resistance levels suggests uncertainty and lack of clear market sentiment, reflecting high levels of risk associated with the stock.
Fundamental Analysis
Looking at financial indicators, Mullen Automotive Inc. seems to have a challenging outlook. The company boasts a market cap of $99.56 million, backed by nearly 240.31 million outstanding shares. However, its notably high negative EPS of -$650.56 paints a concerning picture of the company's profitability.
Moreover, the company has no declared consensus on buy, sell, or hold action, further revealing uncertainty in the market. This uncertainty ties in with the broader narrative of the company reflected in the latest company news.
Review of Recent News
Recently, Mullen Automotive announced rolling out its first commercial electric truck, intending to bolster its product offerings. The company plans to gradually increase production, aspiring to produce 3,000 vehicles annually per shift at their Mississippi factory.
Additionally, Mullen's filing of Form S-8 revealed that it is registering 82 million new shares, indicating a potential dilution of existing shareholders' stakes. This announcement followed a 1-for-9 reverse split aimed at maintaining compliance with NASDAQ regulations, given its stock price should remain above $1 for 10 consecutive days.
Stock Performance Forecast
Based on current performance data and considering factors such as negative EPS, below-average stock price, and apparent stock dilution, Mullen Automotive's stock is anticipated to face significant pressure over the next trading day and the upcoming week. It's crucial for the company to maintain its stock price above $1 to comply with NASDAQ requirements, although the chances look slim based on the current trend.
Stock Evaluation
Considering the extensive analysis above, Mullen Automotive's stock (MULN) is currently rated as a 'Sell'. This rating is due to a combination of both technical and fundamental factors including the significantly negative EPS, potential stock dilution, recent bearish momentum, and the requirement to maintain a higher share price for NASDAQ compliance. These factors present a high-risk profile for prospective and existing investors.
