Mullen Automotive Surges 13% Amid Dilution Fears—Is This a Last-Gasp Rally or a Death Rattle?

• Mullen (MULN) spikes 13% intraday to $0.1706 after hitting $0.1988—the stock’s highest point since its June reverse split
• SEC filing reveals Esousa entities hold 9.9% stake via 210.99M convertible shares—enough to dilute existing holdings by 27x
• 52-week low of $0.1455 vs a peak $470M market cap now erased to $1.6M—99.7% value wiped out since 2021

Mullen’s volatile surge clashes with its fundamentals: massive losses, failed product launches, and a liquidity trap. The stock’s 13% jump—on $80.6M turnover—hints at short-covering or speculative bets, but the underlying story remains a cautionary tale of EV hype gone wrong.

SEC Filing Sparks Short-Term Volatility, But Fundamentals Remain Dire
The surge stems from two catalysts: first, the SEC filing by Esousa entities highlighting their 9.9% stake via convertible notes and warrants—a move that exposed potential dilution risks. Second, the stock’s extreme illiquidity ($0.15-$0.20 range) creates volatility traps where small trades trigger stop-loss cascades. However, the core issues remain unresolved: Mullen reported a $114.9M net loss in Q1 2025, retains $10M debt, and has no credible path to profitability. The Dragonfly EV fiasco—exposed as a rebadged Chinese model—and legal settlements further erode investor trust.

Technical Death Cross Meets Oversold RSI—How to Play the Collapse
Technical Indicators
• MACD: -0.67 vs Signal Line -0.53 (Bearish Histogram: -0.14)
• RSI: 2.17 (Extreme Oversold)
• Bollinger Bands: Current Price ($0.17) vs Middle Band ($1.14)—trading 86% below mean
• 200-Day MA: $1.697 vs 30-Day MA: $2.546 (Bearish Crossover)

With the stock trading near decade lows and fundamentals deteriorating, the short-term setup favors aggressive bears. The RSI’s 2.17 reading—a 20-year low—could spark a bounce to $0.20, but the 200-day MA ($1.697) remains a distant ceiling. Key resistance lies at $0.20 (June peak) and $0.25 (reverse-split-adjusted price), while support is nonexistent below $0.16. The sector’s leader, Tesla (TSLA), is also under pressure (-0.73% today), reinforcing EV sector weakness.

Options Analysis
No liquid options contracts are available for MULN given its nano-cap status. However, traders might consider synthetic bets via sector ETFs like ARKQ (-0.4% today) or inverse ETFs like SPDN. For those brave enough to trade MULN directly, the risk/reward skew favors puts with 90+ days to expiration to capture further dilution panic. Monitor the $0.15 support level—its breach would trigger another 10% drop to $0.135.

Backtest Mullen Automotive Stock Performance
The backtest of MULN's performance after a 13% intraday surge shows poor short-term results, with significant declines in the 3-day, 10-day, and 30-day return rates. The 3-day win rate is 32.40%, the 10-day win rate is 27.27%, and the 30-day win rate is 21.45%. However, the returns over these periods are negative, with a 3-day return of -4.57%, a 10-day return of -12.71%, and a 30-day return of -30.18%. The maximum return during the backtest was -1.66%, which occurred on the first day after the surge, indicating that the stock largely failed to capitalize on the intraday gain.

MULN’s Technicals Signal a Critical Crossroads—Beware the Illusion of a Rally
Mullen’s 13% surge is a mirage in a dying stock. While the RSI’s oversold reading may lure contrarians, the reality is stark: dilution risks, operational failures, and a $10M debt clock leave no room for optimism. Investors should treat this bounce as a final exit opportunity. The sector’s leader, Tesla (-0.73%), shows broader EV headwinds, but MULN’s plight is uniquely existential. Watch for the $0.15 support break—failure here would confirm a death spiral toward delisting. For now, the only winning move is to walk away: MULN’s story is over, and the $1.15 quadrillion headline was just the opening act.