Where Will EV Maker Mullen Automotive Be in 5 Years?
In order to succeed in the long run, California-headquartered electric vehicle (EV) manufacturer Mullen Automotive (NASDAQ:MULN) must find ways to stand out from the competition. It appears that Mullen might achieve this through a strategy of acquisitions. This year, Mullen Automotive’s acquisition targets include Bollinger Motors and Electric Last Mile Solutions (ELMS). Given the company’s rapid expansion, MULN stock has multi-bagger potential over the next five years — but only if the share price can get above a key level first.
It’s no secret that there’s plenty of competition among EV makers in the 2020s. Mullen Automotive differentiates itself, to a certain extent, with powerful vehicles. An example would be the Mullen FIVE RS, which features a top speed of 200 mph and can accelerate from zero to 60 mph in 1.9 seconds.
Whether or not Mullen’s high-performance vehicles will actually threaten the competition remains to be seen. First and foremost, Mullen Automotive has to cover the expenses of its recent purchases — and at the same time, MULN stock must avoid delisting from the Nasdaq exchange.
Mullen Automotive Continues to Pursue Notable Acquisitions
Skeptics might ask, “Who needs a car that can go 200 mph? Isn’t that illegal in most places?” These are fair questions, but Mullen is in the process of expanding beyond its high-performance EVs.
In September, Mullen Automotive announced its acquisition of a controlling interest in EV truck manufacturer Bollinger Motors. More specifically, Mullen received a 60% controlling interest in the company for $148.2 million in cash and stock.
Bollinger Motors is teaming up with truck body and trailer manufacturer Wabash National (NYSE:WNC). Together, they’re developing a refrigerated electric last-mile delivery truck. Hopefully, this will help Mullen get its money’s worth from Bollinger Motors.
More recently, the U.S. Bankruptcy Court granted Mullen Automotive permission to acquire EV manufacturer ELMS. The press release didn’t specify exactly how much Mullen plans to pay for ELMS. However, we do know that Mullen will acquire ELMS’ Indiana factory, which can produce up to 50,000 vehicles per year.
MULN Stock Must Reach and Stay Above This Level
Mullen’s acquisition strategy is aggressive, to say the least. The company is undoubtedly spending sizable sums of money to acquire part of Bollinger Motors and all of ELMS. In time, however, this strategy could make Mullen Automotive more competitive.
There’s another issue to consider, though. MULN stock might eventually gain value due to Mullen’s growth strategy. However, the shares may face delisting threats at some point.
The price of MULN stock has stayed below $1 since late July. Technical analysts might attach importance to this fact, but there’s a much more pressing consideration here.
The Nasdaq exchange has, in some instances, been known to delist stocks after they’ve fallen below $1 and stayed there for a prolonged period. The exchange typically provides warnings and opportunities to rectify the situation first, though.
Still, it would be disheartening if MULN fell afoul of Nasdaq’s listing guidelines for too long. Many investors would be crestfallen if Mullen were to be kicked off of the Nasdaq and ended up on an over-the-counter (OTC) exchange.
So, Where Will MULN Stock Be in Five Years?
Mullen Automotive’s investors will definitely want to keep an eye on that $1 level. The share price needs to clear that hurdle — the sooner, the better.
If that happens, then MULN stock ought to reach $10 in five years based on Mullen’s ambitious acquisition and expansion strategy. This is a speculative bet, however, so be confident but also maintain a very reasonable position size in Mullen Automotive.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
