Mullen Automotive, Inc. MULN shares pulled back sharply early Wednesday after short seller Hindenburg Research accused the company of being a phony EV play.
The stock has since pared some of the losses. Mullen was one of the most-searched tickers on Benzinga Pro in March.
Short Seller Says Battery Business Doesn't Exist: Mullen is among the worst "EV hustles in a crowded field of contenders, Hindenburg said in a short report released Wednesday.
The stock has soared over 300% in the last couple of months, riding on tall claims of possessing ground-breaking technology, EV van production materializing in the near term and a win with a yet-to-be named Fortune 500 customer, the firm said.
Benzinga has reached out to Mullen Automotive for comment on the Hindenburg short report.
Mullen's recent communication regarding updated battery test results is only a rehash of the 2020 announcement concerning the same, the short seller said.
Hindenburg also took exception to Mullen's claims regarding its solid-state battery technology, which the company expects to commercialize in 18 to 24 months. The company spent about $3 million in R&D in 2021, a far cry from the billions of dollars others in the industry are plowing in, Hindenburg said.
The joint venture Mullen announced in 2020 to manufacture its solid-state battery technology is a farce, Hindenburg said, citing a senior executive familiar with the matter. The partnership was with a year-old Chinese company that has since ceased to exist, the short report said.
Mullen Is Only Sourcing EVs, Hindenburg Says: The two EV models the company announced recently are actually Chinese EVs rebranded with a Mullen logo, the short report alleges.
Additionally, the company doesn't possess EPA certificates for the vans, which is an essential prerequisite for selling vehicles in the U.S. This process takes roughly 12-18 months, Hindenburg said.
Hindenburg also went on to say the Mullen Dragonfly supercar announced in 2019 was manufactured by a Chinese company called Qiantu Motors. It was to be rebranded and sold as a Mullen vehicle, but Qiantu has since then terminated the supply agreement due to Mullen defaulting on payment, the short seller said.
The short seller also raised doubts regarding the scalability of Mullen's manufacturing plant in Tunica, Mississippi. The management track record as well as insiders do not evince much confidence, it added.
"With echoes of Nikola Corporation NKLA, Lordstown Motors Corp. RIDE, Kandi Technologies Group, Inc. KNDI and Ideanomics, Inc. IDEX we think Mullen is just the latest in a long line of EV hustles," Hindenburg concluded.
MULN Price Action: Mullen shares were declining 2.57% to $2.65 midday Wednesday, according to Benzinga Pro.
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