According to short-seller Hindenburg research, Mullen Automotive (NASDAQ:MULN) may be the next electric vehicle stock debacle. The news that Hindenburg Research has Mullen Automotive in its sights is not new. The short seller revealed its findings over a month ago.
But those findings are worth revisiting as the stock continues to behave with volatility. Further, many of the Bold claims behind the company are eerily similar to those made by EV upstart Nikola (NASDAQ:NKLA) not that long ago. That debacle is now behind the company, but it’s worth noting that Mullen Automotive Has been singled out by Hindenburg Research, which is the same firm that leveled the initial claims against Nikola. Those claims turned out to be largely substantiated which means current Mullen Automotive investors should take notice.
So, what is Hindenburg Research claiming about Mullen Automotive? The answer is many things really, but it essentially boils down to unsubstantiated retail investor euphoria run amok.
One of the bigger claims relates to Mullen Automotive’s battery technology. The company spent roughly three million on solid-state battery technology in 2021 and claims that the technology is on track for commercialization within 18 to 24 months. That would put it ahead of competitors including QuantumScape (NASDAQ:QS) which have invested much more heavily in technology.
Indeed, the claim does seem dubious. The company also has issues with the 3rd party testing company that compiled data on its batteries. That vendor claims that Mullen misrepresented the results conducted by the company. The CEO stated, “We never would have said that. We never did say it and certainly wouldn’t have said it based on the results of testing that battery.”
The point here is this: Mullen Automotive represents a substantial risk. The trajectory of the company is very similar to that of Nikola. There was a lot of hype surrounding the company but I think the old maxim of “fool me once shame on you, fool me twice shame on me” is very applicable here. As a consequence, tread carefully.
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On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.