Mullen Automotive (NASDAQ: MULN) stock may be zig-zagging across its chart following broader market directional changes. Still, few are arguing against the path of least resistance for MULN stock being ultimately and appreciably higher. By the way, that bullish presumption is more than warranted; it's a likely proposition considering MULN announced a series of accretive deals over the past few weeks that appear to have set MULN in its best position ever to grow its business across several revenue-generating channels.
The rally started in October after several company updates sent MULN shares soaring over 177% intra-month. While market gravity pulled shares off those highs, it's still apparent that not all the MULN bulls have relinquished their grip on shares. In fact, momentum into Monday's trading suggests that the bulls are driving the stock's direction, despite a hardened battle of give-and-take through the early trading hours.
Still, enjoying a more than 10% run higher since last week's lows indicates that the October gains could be put back into the near-term crosshairs. In fact, with news-based fuel added to the MULN tank, the next leg of a MULN rally may exceed its previous highs, about 103% higher than its current $0.30 tag.
Frankly, it would be well-deserved. From a fundamental and operational perspective, MULN has never looked better. They are hitting its operational stride on several tracks, including its potentially transformative acquisition of new assets, a significant decrease in debt, exclusive licensing to market the I-GO last-mile EV in European markets, and strong interest and demand for its FIVE EV Crossover. The totality of those events, combined with good news from Bollinger, put MULN in its best position to create sustainable shareholder value. Analysts covering MULN seem to agree.
An analyst covering MULN now models for MULN shares to reach a fair value of $23 a share within twelve months. If so, a +7,709.85% increase from the last price of 0.30 is in play starting today. Because that analyst has to justify his target, it may be worth checking out. But know this, too. That report was updated before last week's update, and from what was said, things for MULN just got better.
Video Link: https://www.youtube.com/embed/zHWJfzvX3uM
Supporting The Bullish Proposition
Bollinger Motors, which recently became a majority-owned company of Mullen Automotive, Inc., announced Our Next Energy will be supplying modular, linkable Aries battery packs to power its all-electric commercial platforms and chassis cabs. They noted that the ONE battery packs are ideal for its commercial trucks, giving customers the range they need and the added value from them being built in the US and Michigan.
Bollinger's all-electric Class 4 through Class 6 chassis cabs are designed to meet commercial customers' needs in a segment that often requires large payloads, sufficient range, durability, and longevity. The industry-leading Aries LFP battery platform, using no nickel and cobalt, offers superior durability and daily charging of up to 100% without compromise.
This deal should accelerate Bollinger Motors' mission to launch their Class 4 Chassis Cab, designed to hold 1 or 2 battery packs, depending on the customer's desired range needs. It should also expedite getting to market its Class 5 Platforms for walk-in van up-fits, as these packs are expected to be available for Bollinger's expected start of production in late 2023. Of course, from a bottom-line perspective, Bollinger's announcement adds more firepower to an already bullish proposition.
Investors responded well to MULN announcing the elimination of $13 million in company debt, a reduction leaving them with less than $10 million of that drag on the books. That's a sharp decline from the $30 million indebtedness in 2021. But more than just a reduction in outstanding debt, the opportunity more focused on is MULN potentially becoming a debt-free company as early as 2023. For an emerging EV sector player with several products hitting the pavement and development programs in the late stages, it's a distinction attracting more than investor interest; it could also send short sellers for cover.
That gang may want to do so, noting that the accretive updates announced over the past few weeks should positively affect income in Q4 and all of 2023. And with a well-managed and ambitious company starting to do the right things at the right time, MULN's sum of its parts is getting many to believe that MULN is on the verge of transforming itself into an impactful EV sector player.
I-GO Could Make MULN Stock Go
That transition is happening. Actually, from an intrinsic perspective alone, plenty supports higher MULN share prices. In fact, a deal made last month adds appreciably to a strengthening product portfolio and can become a game-changing revenue-generating asset for the company.
Investors appear to be on board with that sentiment. They sent shares higher by over 77% after MULN announced acquiring exclusive sales and marketing rights to sell the I-GO in particular European markets. Considering that the I-GO is described as a "perfect" electric vehicle for urban European markets and knowing that the MULN team can tap into its value, any share price weakness may present an opportunity. Remember, the I-GO is expected to fill a substantial niche last-mile services opportunity in those markets. But here's more good news.
Earlier this month, MULN announced an agreement to appoint Newgate Motor Group, one of Ireland's most recognized dealership groups, as the marketing, sales, distribution, and servicing agent for the Mullen I-GO in Ireland and the United Kingdom, a deal expected to expedite sales into those massive market channels and immediately strengthen the I-GO value proposition. Based on its specs, the I-GO is predicted to serve considerable demand.
Boasting a short but powerful 96-inch wheelbase, 16.5-kWh battery pack, rear-wheel drive, a curb weight of only 1,753 lbs., an NEDC estimated range of 124 miles per charge, and its ability to easily handle the stop/go and weave in/out typical of narrow European urban streets has made the I-GO a polling favorite as the vehicle choice for both last-mile delivery companies and consumers wanting convenience and value. That's no surprise. The I-GO was specifically built to meet known market needs, designed to get to the customer's door faster and provide affordable in-town EV options while decreasing pollution and congestion levels across Europe.
It's attractively priced, too. The I-GO will have a starting price of only $11,999 plus taxes and fees and will be retailed and serviced through supporting local European distributors. Investors in MULN should appreciate the value this deal can deliver. Short sellers, not so much. They may even be willing to admit that the acquisition is a significant win for MULN, an inducement to cover positions. Hence, this decline, in the face of an invigorated sector rally led by sector giants Tesla (NASDAQ: TSLA), General Motors (NYSE: GM), and Ford (NYSE: F), may be short-lived.
Enhanced Revenue-Generating Opportunities
There's plenty more revenue-generating firepower supporting the bullish sentiment. In addition to I-GO providing MULN with potentially massive new market opportunities, it also extends its brand into other countries while simultaneously allowing them to remain focused on its mission of manufacturing its lineup of impressive EVs in the USA. Those include MULN's current commercial vehicle lineup comprised of Class 1 and 2 EV cargo vans, Class 3 through Class 6 vehicles resulting from its majority acquisition of Bollinger Motors, and its Mullen FIVE series.
By the way, in addition to securing the exclusive sales, distribution, and branding rights for the I-GO in Spain, France, Germany, the UK, and Ireland, MULN said it also entered into an Asset Purchase Agreement to acquire all assets of Electric Last Mile Solutions, Inc. and Electric Last Mile, Inc. ("ELMS") from the ELMS Bankruptcy Estates. That deal can also considerably extend MULN's marketing and sales reach.
If so, it will be the start of transforming milestones into catalysts, and MULN scoring several in the past month alone positions the company for a near-term, news-based breakout.
Capitalizing On Near-Term EV Market Opportunities
That's more than likely; it's probable. Paying attention to just those few updates made in October, MULN went from a medium to long-term play to a near-term and compelling value proposition. And recent weakness underscores the opportunity and further exposes a valuation disconnect between share price, portfolio assets, and inherent potential. But as noted, that's not altogether bad news; valuation disconnects reveal investment opportunities, and this recent decline may offer one too good to ignore.
No surprise, there. Its products are "strikingly different" and generating a lot of interest, with its Mullen FIVE EV family a welcomed addition to the premium midsized electric-powered sport utility vehicle market. But it has more than great looks. In addition to what's been described as "stunningly designed and engineered," it's manufactured entirely in the USA. But that's only part of its appeal. Its timeless design and intuitive functionality also showcase power, going from zero to sixty in 3.2 seconds, positioning it at or near the top of many categories compared to competing vehicles' styles and performance. There's still more to help put the FIVE into a class of its own.
It's also equipped with modern advancements like facial recognition technology, an integrated LED lighting system, voice command, and PERSONA, a personal vehicle assistant controlled via app managing preferences and security modes. That's led to consumer opinions overwhelmingly supportive of the car, placing it among the best in the space and earning competitive respect against Ford's Mach E/F, General Motors EVs, the Toyota bZ4X, and the Tesla Model Y. Those wanting to see it in action won't wait long. The first fully functional demonstrator vehicles of the Mullen FIVE EV Crossover began arriving this October, and that's just one vehicle launch in the queue.
More products are expected to roll out soon. MULN plans to bring its Mullen RS to market in Spring 2023, as well as a lineup of commercial fleet vehicles intending to seize a substantial share of the demand for last-mile delivery vehicles. And part of that market, and others, can be exploited through MULN's controlling interest in Bollinger Motors. That interest positions them ideally to capture share in several markets as one of the few offering electric chassis cabs and platforms in several vehicle classes. It immediately moves MULN into the medium-duty truck classes 3-6, along with the B1 and B2 sport utility trucks. Off-road videos of the Bollinger are impressive as well. So, don't think the leisure market isn't in play. It is.
A Valuation Disconnect In MULN Exposed
If fact, several markets are now in play for this emerging EV player. And because they have assembled the pieces to become a much more powerful player in several EV market segments, a compelling value opportunity today can become an extraordinary one tomorrow. In other words, acting sooner than later on this value opportunity may be more than a wise consideration; it's a timely one.
Of course, that action would be justified thinking MULN doesn't have more deals in the queue. That's an unlikely scenario. With its balance sheet strengthened, enthusiasm about its EV lineup, developing opportunities throughout parts of Europe, the UK, and Ireland, and a growing stable of "stunningly different" automobiles hitting the markets, MULN could quickly create substantial shareholder value by leveraging the power of what it has without expending too much more capital.
For those paying attention, MULN's parts are appreciably more potent than a month ago. But with enhanced revenue-generating opportunities in its crosshairs and a team able to seize them, those parts will get even stronger as they mature. Undoubtedly, MULN may have scored EV gold when it acquired exclusivity to the I-GO, and reducing debt can be a game-changer to bottom-line performance. But consider this when appraising MULN. They are just two parts of a much bigger developing story.
And as more chapters get written that enhance an already compelling value proposition, the current $0.30 price per share may become more than a launchpad; it could be the first line to a verse signaling a happy ending. The way the MULN story is playing out thus far, such an ending wouldn't be surprising.
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