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Mullen Forecast: MULN falls 7.6% on Tuesday, Charlie Munger of Berkshire Hathaway fame dies

  • MULN shares lose another 7% on Tuesday, down 39% in the last month.
  • Mullen Automotive filed a response with the Customs and Border Protection agency.
  • Mullen ONE appears to be in the running for a federal contract along with Rapid Response Defense Systems.
  • Shareholders are set to vote on whether to reverse the split on December 15.

Mullen Automotive (MULN), a popular electric vehicle (EV) penny stock, gave up 7.6% on Tuesday, holding relatively steady after the first hour’s decline. Shares of the California-based company have been trending down 39% over the past month as the market awaits a shareholder vote on another reverse split scheduled for Dec. 15.

Late in the day news emerged that Warren Buffet’s right-hand man, Charlie Munger, had died at the age of 99. Munger was a wise favorite among stock investors for half a century. He and Buffet had a 60-year partnership to build Berkshire Hathaway (BRK) into an equity giant. The holding company closed Tuesday with a market capitalization of just $783 billion.

Electric vehicle stocks retreated to $0.1640 in Tuesday’s session, while the US stock market rallied in the last hour with the S&P 500, NASDAQ Composite and Dow Jones making slight gains.

News on Mullen’s actions: Response for Mullen ONE filed with US Customs and Border Protection agency

On Monday, MULN shares closed slightly higher after it was learned that it has filed a response together with the Rapid Response Defense Systems with the US Customs and Border Protection Service (CBP), the federal agency that oversees for compliance with legislation regarding customs duties, immigration and international trade.

It is a response to CBP’s questions about the origin of the components used in the manufacture of Mullen’s Class 1 EV cargo van, the aptly named Mullen ONE. The cargo van is manufactured at the company’s plant in Tunica, Mississippi, but uses parts sourced from distributors in South Korea, Germany, Romania, China, Canada and the US.

Rapid Response is a federal government contractor participating in a $2.7 billion contract for federal vehicles with the General Services Administration. The company supplies equipment and supplies to US intelligence agencies, the Department of Defense and other federal agencies such as CBP.

In March, Rapid Response named Mullen the exclusive supplier of Class 1 EVs, as the Mullen ONE is the only Class 1 EV available in the US market.

“With the federal government’s strong interest in electrifying a growing portion of its vehicle fleet, Mullen’s commercial portfolio is very well positioned,” Fred Bouman, SVP of Rapid Response – Federal, said in a March statement. .

Mullen will join Rapid Response to unveil the Mullen ONE at a government vehicle conference in January 2024. Any large-scale contract with the federal government would be a big boost to Mullen’s reputation as well as its bottom line.

For now, however, shareholders are focused on the December 15 meeting, where CEO David Michery will try to get the votes to enact the third reverse stock split of the year. Under an agreement with the NASDAQ exchange, Mullen has to raise the price of his shares above $1 by the end of January next year. The council has already approved a ratio of between 1 per 2 and 1 per 100.

Mullen Stock Forecast

Mullen stock has lost its support position in the $0.1800 to $0.1700 range that lasted for the past two weeks. Once again, MULN is declining as shareholders leave the company ahead of the reverse split vote. Investors like stock splits, but not reverse splits for the most part.

MULN is trading below its 9-day SMA, which is always a bad sign. For a rally to emerge, the bulls must first push MULN above the $0.2210 level that acted as the previous support floor in late October. This level coincides with the 21-day SMA, which gives it more importance.

MULN daily chart

Source: Fx Street

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