Mullen Automotive Stock Surges: What's Behind the Recent Rally?

Mullen Automotive, Inc. (NASDAQ: MULN) shares have been on a rollercoaster ride lately, with the stock price skyrocketing today by 81% to $4.27 at last check Wednesday. This significant increase can be attributed to two main factors: the company's partnership with National Auto Fleet Group (NAFG) and its recent reverse stock split.



Firstly, Mullen Automotive announced that its commercial EVs are now available for purchase on Sourcewell under NAFG's Sourcewell Contract #091521-NAF. This partnership enables public sector organizations, such as government agencies and educational institutions, to directly procure Mullen EVs through NAFG, skipping lengthy bidding procedures and significantly reducing their time to acquisition. This news is particularly positive for Mullen Automotive as it expands its customer base and streamlines the purchasing process for its commercial EVs.

Secondly, Mullen Automotive announced a reverse stock split, effective February 18, 2025. This move aims to bring the company into compliance with the minimum bid price requirement for maintaining its listing on Nasdaq. Reverse stock splits can sometimes lead to a temporary increase in stock price due to supply and demand dynamics, as the number of outstanding shares decreases, and investors may perceive the stock as more valuable.



Despite the recent surge in Mullen Automotive's stock price, the company's financial performance has been challenging. In 2024, the company reported a net loss of -$470.96 million, which was -51.19% less than in 2023. However, the company has been working on cost-cutting measures, such as reducing headcount and personnel costs by approximately $13 million annually, to improve financial efficiency.

Investors may be attracted to Mullen Automotive's recent stock price surge due to partnerships, product offerings, financial performance, regulatory trends, and leadership. However, potential risks and concerns include the success of partnerships, competition in the EV market, financial volatility, regulatory changes, and the management team's ability to execute on strategic plans. Investors should carefully evaluate these factors when considering the stock's long-term prospects.

In conclusion, Mullen Automotive's stock price surge can be attributed to the company's partnership with NAFG and the upcoming reverse stock split. These events align with the company's strategic initiatives and financial performance, although the company's financial health remains a concern. Investors should carefully consider the potential risks and opportunities when evaluating the stock's long-term prospects.