Why Mullen Automotive Stock Is Moving Higher

Mullen Automotive Inc MULN shares are trading higher Thursday after the company on Wednesday announced the retention of a law group to investigate possible naked short selling. The company also announced a buyback on Thursday.

What Happened: Mullen said it received reports that led it to believe it may have been the target of a "market manipulation scheme" involving illegal naked short selling.

The company has retained Christian Attar, in partnership with Warshaw Burstein LLP, to investigate and expose any potential wrongdoing. Mullen noted that Christian Attar has collected millions of dollars in aggregate damages on behalf of prior clients fighting against market manipulation schemes. 

Mullen previously announced that it was taking affirmative steps to address concerns regarding "extraordinary trading volume and evidence of unusually high levels of failure to deliver on short sales."

"Since our announcement on April 28, we have been actively investigating naked short selling and we now have enough intel to have the law firm actively investigate and, where justified, take action against any market manipulators using naked short selling, spoofing or other illegal acts," said David Michery, chairman and CEO of Mullen.

What Else: Mullen also announced that its board authorized a buyback of up to $25 million worth of its common stock. The company may purchase shares from time to time until Dec. 31.

"We are initiating this buyback program as an attractive opportunity to deploy capital and return value to our shareholders," Michery said.

MULN Price Action: Mullen shares closed Wednesday up 69.4%. The stock was up another 46.2% Thursday morning at 25 cents at the time of publication, according to Benzinga Pro.

Photo: Ivan Radic from Flickr.