Mullen Automotive (NASDAQ: MULN) is evidently looking to settle discontent among shareholders, issuing this morning a letter to investors in an attempt to calm fears related to the decrease in its share price.
The company has reportedly received countless emails from shareholders related to the recent decline following a reverse split conducted in May on a 1-for-25 basis.
“We want to respond to the many emails and calls regarding the decrease in our share price. Since March 31, 2023, our stock has declined 90% from $3.25 per share. On June 13, 2023, the Company’s common stock closed at $0.32 per share. The Company currently trades at a discount to its current cash position of $135 million or $.038 per share.”
The company then stated that they had a book value per share of $2.08 as of March 31, while having recently completed the acquisitions of Bollinger Motors and Electric Last Mile Solutions which “added valuable unencumbered assets to the balance sheet.” The sale of Mullen’s Class 3 vehicles meanwhile are slated to begin in the quarter ending September 30, 2023, which the company expects will add further value to shareholders.
The company failed to mention however, that on a post-reverse split adjusted basis it had 126.3 million shares outstanding as of March 31, 2023. Based on a filing made on June 13, the number of outstanding shares has more than doubled in the time since to 263.3 million.
Another proposed reverse split
Despite attempting to calm investor fears related to the share price, two days earlier, on June 13, the company filed its notice of annual meeting of stockholders. Within, the company included a proposal to first amend its 2022 equity incentive stock plan to enabling the issuance of 52.0 million additional shares under the plan.
Second, the company has requested approval to conduct another reverse stock split, despite having conducted one just last month. The proposed share consolidation would be conducted at a ratio between one post-consolidation share for every two pre-consolidation shares held, and one post-consolidation share for every ten pre-consolidation shares held.
The consolidation is said to be required as a result of the company’s shares again trading below the minimum bid requirement of $1.00 per share.
The meeting to potential approve the proposals, among others, is slated for August 3, 2023.
Mullen Automotive last traded at $0.23 on the Nasdaq.
Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
