Hindenburg Research Shorts Mullen Automotive
Today, Hindenburg Research published an extensive research on Mullen Automotive and has taken a short position. Hindenburg Research are very detailed with their research, they take them seriously, and back their opinions on researched publicly traded companies by taking taking short positions. I haven't heard or Mullen Automotive until today and was surprised it was even a publicly traded company. Diving into finding out more about the company, it became very clear how finding a truthful information is not a task. There is so much deception and it is not easy to tell what is an honest marketing strategy, and what is a complete lie. That's why I really appreciate the research Hindenburg Research does and shares with the public.
Mullen Automotive is EV manufacturing company, or at least wants to become one. It is a publicly traded company and its stocks trade under the ticker $MULN and its current price is $2.65. When I looked at the stock chart, I could see the overall trend of the price has been downward for a while. The chart showed the price history going back to 2012. This didn't make sense. If it is a new company why would it stock be trading for last ten years. It turns out Mullen Automotive became publicly traded after a reverse merger with Net Element, which used to trade under ticker $NETE. Net Element is or was a company that specialized on mobile payments, but business was failing.
For whatever reason these two companies merge in November 2021. It seems like it was a way for Mullen Automotive to become a publicly traded company without dealing with traditional IPO process. This was a reverse merger, which means private company buys or takes over the publicly traded company. After the merger, the newly merged company started trading as $MULN. It is a legal way of becoming a publicly traded company. However, I do find it to be somewhat deceptive tactic. SPAC has been happening for a while. I guess it is a norm in the markets.
Although, currently the price of the $MULN is at $2.65, around the time of the merger or right after, its price went up above $11. And in a very short time it dropped below $1 too. Short position and especially the research done by Hindenburg Research probably won't help its price either. I will not be taking any positions myself, due to lack of cash at this time. But it will be interesting to watch what will happen to this stock. Markets are crazy, people speculate all the time. Maybe nothing will happen.
If you are going to trade make sure to do your own research. Everything is not always what it seems to be. I look at MullenUSA website and everything looks good, nothing suspicious, another company entering the EV competition. On the other hand, I look at the Hindenburg's research and see a completely opposite story. Feel free to read the full report yourself. This story reminds of the of the deception tactics Nikola Motor's and its CEO utilized to defraud its investors. According to the HR, the company only spend $3 million in Research and Development, but make bold claims about its technology, especially about their solid-state battery technology. They claim their solid-state batteries will be ready for commercial use in about two years. $3 million annual funding for research and develop this technology does seem very little, considering competition in this space. In addition to lack of funding, its claims about testing seems to be not so honest and nothing there is nothing to prove or show otherwise.
HR was able to find out through import records that Mullen Automotive acquired 2 electric cargo vans from Chinese EV manufacturers, while at the same time announcing that they will be manufacturing two types of EV vans. Lol. I guess nothing is wrong with rebranding selling a product that someone else made. But claiming you are the one who is making them doesn't sound right. It looks like this wasn't the first time Mullen utilized such strategy either. Mullen has done similar things before as well, when they rebranded a car and presented as their own when in fact it belonged to another Chinese manufacturer, Qiantu Motors. After the dispute and with Qianty and revelation of this story, this project wasn't realized, and this car didn't happen.
What I found really funny in HR report is the story about Mullen's manufacturing facility. Mullen acquired a facility in Mississippi that was originally built for manufacturing pizza delivery cars but that endeavor failed by the previous owners. So, Mullen purchases this property and claims that they have state-of-art equipment and machinery to manufacture their EV. On their website they show one advanced manufacturing equipment, which was actually a stock photo purchased from Adobe stock images. lol.
How is this even possible? How can a company with so many red flags even be allowed to be traded in public markets? I am not suggesting strict regulations. Just pondering why there are loopholes in the markets that allow such deception of investors happen? Regulators have been talking about crypto markets and how investors should be protected, and they can't even get the stock markets clear of fraud. I am also not suggesting it should be difficult for company to become publicly traded either. I just wouldn't want the markets to be designed to defraud people. Let me know what you think about Mullen Automotive? If you have tried one of their EV cars, please let me know in the comments.
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Here's the thing these government arms that are built to suppose to protect people have simply become a oh we wont worry about it until it's large enough that we can cash in a big paycheck from it and investors still get screwed. It's legit freakin nutz and these systems need to be dissolved.
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That’s a good ooint. I saw Nikola was fined for $100 million or so for fraud.
I have read that Mullen Automotive's balance sheets are also suspicious and the company facing a critical cash problem.
You are thorough.
The problem is with government bodies allowing such things. Should take preventive steps to stop such activities.
Strict measures and penalties should be taken by government after displaying fake manufacturing equipment, stock markets should be free from fraud، it will represents a risk to investors
The annual financing amount holds many secrets that must be taken care of before entering into investment, as its red indicators and its fraud commercial photos weaken its reputation.
Yeah it's crazy that these sorts of companies are allowed to use these tactics. This company sounds like it's just trying to make as much money as it can from investors before pulling an exit scam.
I remember Hindenburg from the entire Nikola Motors debacle and it's kind of crazy what people can get away with. I think the EV trade is a bit overcrowded and I don't feel optimistic about any of these new companies getting in because I feel they are late.
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I agree, it won’t be easy to get any market share in EV, especially for companies nobody knows about.
That's how the world functions 😃 People try to find out loopholes to protect themselves and our so-called Governments can't do much about it because they are the ones who have given birth to such faulty regulations.
I also want to buy an EV next. They help to save fuel and also happen to be very cost effective. I am just waiting for the EV charging infrastructure to mature in my country and then I will be in for the ride.
You are right. Can’t expect much from rigged systems.
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Remember being very confused when they actually let them go public last year – it just seemed like such an obvious repeat of the Nikola spectacle. Looks like another outright fraud, and even after having dropped a lot in price they're still listed with a market cap of $634 mill (hive has a market cap of $385 mill for comparison).
If they are listed, they are traded. Some people like to gamble in markets regardless the fundamentals.
This is confusing. It's a new company so exactly, how is it trading as new. When you mentioned it's been listed all these years. Looks like a red flag !
This is not appropriate and the issue need to be looked into
:( There will always be fraud, unfortunately. It's just some people will always find a way to deceive and take advantage of loopholes..
Wow!
Lies, deception, misrepresentation…
The very thing regulators from the SEC are suppose to protect investors from. Sometimes when you get obsessed with a small aspect of your job, you neglect the most important portion.
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I see five negative downvotes. Do those return a portion of your rewards to the reward pool? Or do they earn rewards for the downvote accounts? Who created these x-accounts? They are names after some famous accounts on Steem and Hive.
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I have no idea. I didn’t even notice until mentioned.
If you are going to trade make sure to do your own research. Everything is not always what it seems to be — very correct and important advice , not all that glitters is gold .