Retail Confidence In Mullen Automotive Stock Remains ‘Bearish’ Pre-Market After EV Maker Unveils Cost Cuts

Shares of electric vehicle (EV) manufacturer Mullen Automotive, Inc. (MULN) slumped more than 7% in pre-market trading Monday, with retail sentiment remaining pessimistic.

The company announced a series of cost-cutting measures, including a 20% reduction in headcount, which amounts to roughly 65 employees, based on its end-September 2023 workforce of 326, according to FactSet data.

Despite the cuts, Mullen expects to generate $75 million in GAAP revenue over the next six months, driven by sales from its Mullen Commercial and Bollinger Motors divisions.

The company plans to reduce its monthly operating costs by $5.5 million to $7.3 million, achieved through layoffs, the elimination of five passenger vehicle programs, and consolidation of facilities by terminating leases and subleasing non-essential properties.

Retail investors on Stocktwits, however, remained unconvinced. Sentiment for MULN hovered in the ‘bearish’ zone ahead of Monday’s open.

Mullen’s stock has lost almost all of its value so far in 2024, forcing the company to enact a 1-for-100 reverse stock split to maintain its Nasdaq listing.

Although Mullen generated $16.8 million in revenue over the nine months ending in June, it has yet to recognize that income.

Over the same period, the company reported a net loss of $326 million, an improvement from the staggering $806 million loss a year prior, but still concerning.

The company’s cash reserves, including cash equivalents, have dwindled to $4 million from $155.7 million a year earlier.

In 2022, Mullen spent $148 million acquiring Bollinger Motors and another $240 million on Electric Last Mile Solutions, significant investments that have yet to produce a meaningful return.

CEO David Michery remains optimistic, saying on Monday that with the production ramp-up of Bollinger’s B4 and the momentum in Mullen’s commercial vehicle sales, the company’s near-term cash flow could improve.

However, amid a challenging market environment where EV makers are cutting prices to spur demand, Mullen’s efforts seem insufficient to sway investors, who remain skeptical of the company’s long-term viability. 

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