Mullen Automotive Stock Is Tumbling Thursday: What's Driving The Action?

Mullen Automotive Inc MULN shares are diving Thursday after the company announced a 1-for-100 reverse stock split.

What To Know: Electric vehicle manufacturer Mullen announced that it will effect a 1-for-100 reverse stock split of its common stock, effective June 2. The company’s stock will begin trading on a split-adjusted basis at the market open on Monday.

Mullen said the reverse stock split is intended to bring the company into compliance with the Nasdaq’s minimum bid listing requirements of $1 per share.

Mullen shareholders voted to approve a proposal on May 21 allowing the company to authorize a reverse stock split in the range of 1-for-2 to 1-for-250. The company’s board approved the 1-for-100 reverse split this week.

No fractional shares will be issued in connection with the split. All fractional shares will be rounded up to the nearest whole share.

How to Buy MULN Stock

By now you're likely curious about how to participate in the market for Mullen Automotive – be it to purchase shares, or even attempt to bet against the company.

Buying shares is typically done through a brokerage account. You can find a list of possible trading platforms here. Many will allow you to buy “fractional shares,” which allows you to own portions of stock without buying an entire share.

In the case of Mullen Automotive, which is trading at $0.11 as of publishing time, $100 would buy you 909.09 shares of stock.

If you're looking to bet against a company, the process is more complex. You'll need access to an options trading platform, or a broker who will allow you to “go short” a share of stock by lending you the shares to sell. The process of shorting a stock can be found at this resource. Otherwise, if your broker allows you to trade options, you can either buy a put option, or sell a call option at a strike price above where shares are currently trading – either way it allows you to profit off of the share price decline.

MULN Price Action: Mullen Automotive shares were down 28.4% at $0.1089 at the time of publication Thursday, according to Benzinga Pro. Mullen shares are now down more than 99% year-to-date. The company has a market cap of just $6.76 million as of Wednesday’s close.

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Photo: courtesy of Mullen Automotive.