To say the short sellers were wrong about Mullen Automotive (NASDAQ: MULN) would be ludicrous. With the stock down 95% in the last year alone, it is obvious the short sellers were very, very right about Mullen Automotive stock.
Are they right now? The company has issued many positive news releases compounded by another that has it on track to produce vehicles next quarter. That’s next quarter — a full year ahead of schedule. Odds are high that company momentum will build. The shorts were right about Mullen then, but this is now. They might not be so right after all.
The short sellers are still out in force but have trimmed their holdings. The short interest in Mullen Automotive at the start of December is only 10%, down more than 75% from only two weeks ago. While not a guarantee this stock is at the bottom it is another bit of evidence that suggests that a major turnaround brews in this market.
Mullen Automotive Closes on ELMS Assets
Mullen Automotive issued a press release today stating it had closed on the Electric Last Mile Solution assets. These include a production facility, inventory and intellectual property. The truly good news in this announcement is that plans to start production of Mullen Automotive’s commercial vehicle line which will include Bollinger Motors vehicles as well. Deliveries will begin in the first half of the year barring any hiccups; another revenue stream is at hand. This news follows the I-GO deal with Newgate Motor Group to market vehicles in Ireland, the United Kingdom and parts of the European Union.
The plant in Mishawaka, Indiana, was previously used to build Hummer H2s and Mercedes R-Class vehicles so is fully capable of producing Mullen vehicles. At this time, the company plans to launch the Mullen Five SUV crossover as well as the Bollinger B1 and B2 platforms. The company plans to start building and delivering Class-1 vehicles in Q1 2023 with Class-2 deliveries beginning in Q3.
“I have been working on this plan for many years, putting in place the strategic and critical enablers to be a dominant competitor in the EV market,” said David Michery, CEO and chairman of Mullen. “Successfully completing this asset acquisition moves Mullen into an all-new position with IP, plants and product platforms that no other competitor can offer to both retail and commercial customers. We have everything we need to launch the Mullen and Bollinger EVs product lineup.”
Mullen Automotive Misses Deadline: So What?
The price action in Mullen Automotive came under intense pressure in the weeks leading up to the ELMS takeover. The cause was an anticipated deadline that turned out to be a non-news event. The deadline was for a definitive order for vehicles from an Amazon delivery partner that may yet still come. Not getting the order did not cause a share price implosion and now there is a new catalyst to buy. The primary reason to short Mullen is the lack of production and revenue, which is now moot.
Mullen Automotive shares are up strong double digits on the news and on incredibly high volume. The average daily volume over the past month has been in the range of 155 million shares. The market hit that target within the first half hour of trading. Assuming the market views this news as favorably as it appears shares of Mullen Automotive could complete a bottom and reverse course. Near-term targets are near $0.60 while mid- to long-term targets are in the $1 to $10 range. 
