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• Mullen Automotive initiated a 1-for-9 reverse split that begins trading at new post-split price on August 11. 
• MULN share price closed at $0.1130 on Thursday but opens Friday at post-split price.
• Mullen stock needs to remain above $1 for at least 10 consecutive trading sessions to remain in compliance with NASDAQ exchange rules.
• Mullen has begun manufacturing class 3 commercial EVs in Mississippi.

Mullen Automotive (MULN) stock plunged 8.6% at Friday’s open after debuting its new reverse split-adjusted share price. MULN needs to trade above the $1 price tag for 10 consecutive sessions in order to keep its listing on the NASDAQ exchange.

Mullen stock news: Second reverse stock split puts MULN above $1

This is already the second reverse split Mullen enacted in 2023. Back in early May, Mullen went through with a 1-for-25 split that briefly pushed the share price up to $1.60. But CEO David Michery and the company immediately began a massive share sale policy at that time to raise money for the fledgling electric vehicle (EV) company that pushed the share price back down near $0.10.

Since Mullen’s board won the right to enact a reverse split at its recent shareholder meeting of between 1-for-2 and 1-for-100, it is somewhat surprising that the board did not lunge for a higher post-split share price. The post-split price is only narrowly above NASDAQ’s compliance threshold of $1. 

Mullen needs to keep the share price above $1 for at least 10 consecutive trading days but no more than 20. In a press release, the company readily admitted this was the case.

“There is no guarantee the Company will meet the minimum bid price requirement,” the statement released on Thursday reads.

NASDAQ listing rule 5810(c)(3)(H) has other caveats as well. Rule 5810(c)(3)(H) states: 

“Staff may, in its discretion, require a Company to [maintain a bid price of at least $1.00 per share] for a period in excess of ten consecutive business days, but generally no more than 20 consecutive business days, before determining that the Company has demonstrated an ability to maintain long-term compliance. In determining whether to require a Company to meet the [minimum $1.00 bid price standard] beyond ten business days, Staff will consider the following four factors: (i) margin of compliance (the amount by which the [bid price is above the $1.00 minimum standard]); (ii) trading volume (a lack of trading volume may indicate a lack of bona fide market interest in the security at the posted bid price); (iii) the Market Maker montage (the number of Market Makers quoting at or above $1.00 and the size of their quotes); and, (iv) the trend of the stock price (is it up or down).”

This gives the NASDAQ exchange a whole lot of leeway in determining Mullen shareholders’ fate. On the bright side, management reiterated its earlier announcement that it plans to begin buying up to $25 million worth of shares once it files its next 10Q, so that policy should push up the share price to a safer level.

Some existing shareholders will also gain additional equity since Mullen has decided not to issue any fractional shares and instead “round up” units of less than nine shares to the next whole share figure. For example, shareholders with 100 shares on August 10, will be given 12 shares on August 11 instead of 11.1 shares (i.e. 100/9).

In other news, Mullen announced this week the start of production for its Mullen Three EV semi truck cab. Mullen has already received $79 million worth of purchase orders for 1,250 Mullen THREE class-3 EV trucks from Randy Marion Automotive Group and MGT Lease Company, and the first batch will be delivered later this month.

The class-3 commercial vehicle is being built at Mullen’s Tunica, Mississippi plant. The Mullen Three has an MSRP of $68,500 before tax subsidies.