Mullen Automotive (MULN) Stock Falls on No Fortune 500 Update
Mullen Automotive (NASDAQ: MULN) shares are down 5% this morning following the announcement that the electric vehicle company did not reveal its name to that Fortune 500 company it is said to be working with.
Shares of investors are being sold off MULN stock following the Brea company based in California missed an obligation to disclose information regarding this Fortune 500 order. Mullen Chief Executive Officer David Michery had earlier declared that Mullen would release “everything” about a Fortune 500 company it’s working with at the close on the first quarter which was today. The company’s inability to divulge any information thus far has clearly disappointed Mullen Automotive shareholders.
This year so far, MULN stock has dropped 80percent to trade at $1.08 per share.
What Happened With MULN Stock
The social media world was abuzz when Michery was interviewed by Benzinga on June 3. interview with Benzinga the 3rd of June. In that interview, he said that Mullen to release an official press release on June 30, which would reveal the details of an electric delivery van that was bought by an Fortune 500 company as part of an experimental program. While Michery was unable to provide many specifics about the transaction however, he did mention that Mullen made an electric delivery on the 12th of May in the year of this Fortune 500 company he referenced.
Michery then said it was a Fortune 500 company had put Mullen’s electric van in an “pilot program” and was “pleased” with its performance. Michery added that “everything,” including details of the order’s size and delivery times and names of the business will be revealed before the end of the current quarter, which begins today. In the press release released today, Mullen did not give any additional details. It did mention that the strength of its balance sheets at end of Q2 was among the most robust in its history.
Why It Matters
Inability to reveal any details regarding the transaction appears to have provided MULN investors another incentive to buy the company’s stock. Mullen is a tiny startup that’s not making a profit and is investing money at an alarming rate. These facts explain the dramatic drop in the value of the stock this year when investors sell shares of unprofitable, high-growth businesses.
However, Mullen Automotive has been making progress in improving its operations. It has appointed John Taylor to be the company’s senior vice-president for global production and planning. Taylor is an experienced veteran of the automotive industry, and was one of the first 50 employees to be hired in the company Tesla(NASDAQ: TSLA). The company also broke ground on its its battery plant, and is now making battery packs for electric vehicles.
What’s Next for Mullen
MULN stock is down today following the company did not announce any information regarding orders for electric vehicles or an alliance with a major corporation. The shareholders and investors who are already skeptical are taking the lack of announcements in a negative way and use it as an excuse to sell the shares.
As long as Mullen Automotive demonstrates that it receives the orders to build electric vehicles the shares of the company are likely to remain under pressure.
Furthermore, even though the first press release of today did not mention information about this Fortune 500 company, investors will likely be waiting until the closing today to find out whether there is an additional press release.