Mullen Automotive Inc. will conduct a 1-for-25 reverse stock split as the electric-vehicle company looks to maintain its Nasdaq listing.
The company’s stock, which has been attracting meme-like attention, ended Wednesday’s session down 21.1%.
The stock will continue to trade on the Nasdaq Capital Market under the existing symbol “MULN” and will begin trading on a split-adjusted basis at market open Thursday, Mullen
MULN,
said Wednesday.
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“The reverse stock split is primarily intended to bring the company into compliance with the $1.00 minimum bid price requirement for maintaining its listing on Nasdaq,” Mullen said, in a statement. “There is no guarantee the company will meet the minimum bid price requirement.”
In March, Mullen announced that the Nasdaq had approved the company’s request for a 180-day extension to meet the $1 minimum-bid-price requirement. On Sept. 7, 2022, the Nasdaq notified the company that its stock was not compliant with rules as it had traded below $1 for more than 30 days.
An influential meme-stock trader, who goes by Obi, told MarketWatch that news of the reverse stock split came as no surprise. Obi, whose Making Easy Money YouTube channel has over 28,000 subscribers, said that he has been discussing the possibility of stock split happening “any day now” on the channel.
Obi told MarketWatch that the reverse stock split is “a great move,” citing its impact on Mullen’s share float. “Turning the close to 3.55 billion [share float] into numbers close towards 142 million will be ideal,” he said. “I would love to see MULN have a share float lower than its market for once.”
“I see this reverse stock split being more than a great gain compliance move for the company but, more so, a great way to fix past dilution,” Obi added.
Mullen shares have seen a dramatic spike in trading volume recently, with average trading volume of 1.1 billion shares Wednesday and 547.8 million shares over the past five days, according to FactSet data. The stock’s 65-day average trading volume is 279 million shares.
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Mullen Automotive Inc.’s stock soared last year after Amazon.com Inc.’s
AMZN,
delivery partner placed an order for up to 600 cargo vans, and the company has since teamed up with Rapid Response Defense Systems to supply vans for federal government business.
In December, Mullen announced that it is partnering with Loop Global Inc. to build public and private EV-charging technology, infrastructure and network solutions. Earlier this year, Mullen joined forces with Qiantu Motors to launch what they called an EV supercar.
The company’s stock has fallen 77.7% this year.
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