EV maker Mullen now has enough cash to fund operations for more than a year

MW EV maker Mullen now has enough cash to fund operations for more than a year

By Tomi Kilgore

Mullen's stock surges after $150 million in new financing is announced

Shares of Mullen Automotive Inc. rallied Tuesday after the maker of commercial electric vehicles announced new financing commitments that give it access to enough cash to run its business for more than a year.

The stock (MULN) ran up 12.1% in morning trading. The gain means the stock is now up 6.4% this week, which puts it on track for a four-week winning streak. That would be the longest such streak since the four-week stretch that ended March 18, 2022.

The stock has rocketed 154% since it closed at a split-adjusted record low of $2.55 on April 22.

The company said earlier Tuesday that it received a $100 million financing commitment from a family office and has 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 enough cash and cash equivalents to fund operations over the next 13 months for both Mullen and Bollinger Motors, which includes Bollinger Motors B4 vehicle production," the company said in a statement.

Mullen had acquired a majority interest in Bollinger, an electric-truck maker, in September 2022 for $148.2 million in cash and stock.

Mullen had said in early April that it was making "significant" cost cuts of about $170 million over the next 12 months and was now focusing on the commercial EV business given the weakness in the consumer EV market.

And in late April, the company said it had received approval in California for vouchers that could lower the cost of its Mullen Three truck down to $16,000 from the suggested retail price of $68,500.

Meanwhile, the stock was still down 99.4% over the past 12 months. It had been under threat of being delisted last year given its low price, prompting the company to implement three reverse stock splits that multiplied the stock price by a total of 22,500 times. The last reverse split, of 1 for 100, took effect in December.

Read: Mullen's stock rockets after large reverse split keeps listing hopes alive.

While the stock price is currently high enough that the risk of delisting is off the table, at least for now, the company has warned in its quarterly filings and annual reports going back to 2021 that there was "substantial doubt" about its ability to continue as a going concern.

Mullen's stock has tumbled 54.7% year to date, while the Global X Autonomous & Electric Vehicles exchange-traded fund DRIV has edged up 0.7% and the S&P 500 SPX has gained 9.6%.

-Tomi Kilgore

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May 14, 2024 11:49 ET (15:49 GMT)

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