Shares of Mullen Automotive Inc. soared on Tuesday following the company’s announcement of new financing commitments. These commitments provide the company with ample cash flow to sustain its operations for over a year.
The stock MULN experienced a significant increase of 12.1% during morning trading. The increase in value indicates that the stock has risen by 6.4% this week, positioning it for a four-week period of consecutive gains. That would mark the longest consecutive period since the four-week duration that concluded on March 18, 2022.
The stock has surged an impressive 154% since it reached a split-adjusted record low of $2.55 on April 22.
The company announced earlier on Tuesday that it secured a $100 million financing commitment from a family office and has also sold up to an additional $50 million of convertible debt to family offices and high-net-worth investors.
“With the $150 million funding commitment, the Company has sufficient cash and cash equivalents to support operations for the next 13 months for both Mullen and Bollinger Motors, including Bollinger Motors B4 vehicle production,” the company stated.
Mullen purchased a majority stake in Bollinger, an electric-truck manufacturer, in September 2022 for a total of $148.2 million in cash and stock.
Mullen announced in early April its plans for “significant” cost reductions of approximately $170 million within the next year. The company has shifted its focus towards the commercial EV sector due to the current challenges in the consumer EV market.
In late April, the company announced that it had obtained approval in California for vouchers that could significantly reduce the cost of its Mullen Three truck. The vouchers have the potential to bring down the price from the suggested retail price of $68,500 to just $16,000.
Meanwhile, the stock had experienced a significant decline of 99.4% over the past 12 months. Last year, the company faced the risk of being delisted due to its low price. In response, the company carried out three reverse stock splits, resulting in a significant increase in the stock price. The most recent reverse split, which was 1 for 100, became effective in December.
Although the stock price is currently at a level where delisting is not a concern, the company has consistently expressed doubts about its long-term viability in its quarterly filings and annual reports since 2021.
Mullen’s stock has experienced a significant decline of 54.7% year to date, in contrast to the slight increase of 0.7% in the Global X Autonomous & Electric Vehicles exchange-traded fund DRIV and the notable gain of 9.6% in the S&P 500 SPX.
