Mullen Automotive's (NASDAQ: MULN) "Strikingly Different" EV Crossover tour made its third stop in Las Vegas last week. And the reviews are in: its EV lineup are stunners. Even Tesla (NASDAQ: TSLA) influencers are impressed, with "Joe," a popular voice across social media platforms, saying, "I'm completely blown away by the design, craftsmanship, and quality of the FIVE and can't wait to get this vehicle out in front of my fans." He isn't the only one. The more MULN shows its vehicles, the more impressed markets and consumers get. It's helped its stock as well.
While tending to follow sector directions, MULN stock remains bullish after a series of accretive deals announced over the past few weeks have investors believing that MULN may be in its best position to accelerate growth across several revenue-generating channels.
The bullish sentiment traces back to October when MULN bulls sent shares soaring by over 177% intra-month. While some of those gains gave way to market gravity that pulled shares off those highs, it became apparent that the bulls hadn't entirely relinquished their grip on its stock. On the contrary, trading patterns suggest that the bulls still control the reigns despite a hardened battle of give-and-take with the bears. Still, higher is higher, and the over 10% jump to start the week may very well be the precursor to more near-term gains.
Those following the MULN story appreciate that the gains are well-deserved. From a fundamental and operational perspective, MULN has never looked stronger. They significantly reduced debt, closed a potentially transformative acquisition of new assets, scored exclusive licensing to market the I-GO last-mile EV in European markets, and earned strong interest and inferred demand for its FIVE EV Crossover. All tolled, those accomplishments alone position MULN for a breakout performance. Analysts covering the stock agree. One of them expects MULN shares to reach $23 a share within twelve months, 7,831% higher from its current $0.30 price.
But while he models for an exponential increase in value, that model was made before MULN's recent news.
Video Link: https://www.youtube.com/embed/zHWJfzvX3uM
Portfolio Assets Support Higher Valuations
And it supports even higher valuations. This month, Bollinger Motors, which recently became a majority-owned company of Mullen Automotive, Inc., announced Our Next Energy will be supplying modular, linkable Aries battery packs to power its all-electric commercial platforms and chassis cabs. They note that the ONE battery packs are ideal for its commercial trucks, giving customers the range they need and the added value from them being built in the US and Michigan. Bollinger's all-electric Class 4 through Class 6 chassis cabs are designed to meet commercial customers' needs in a segment that often requires large payloads, sufficient range, durability, and longevity. Using the industry range-leading range Aries LFP battery platform, which uses no nickel and cobalt, is proving to offer superior durability and daily charging up to 100% without compromise.
That's a big deal. And teaming with ONE is expected to be a near-term value driver for all. In fact, since halting the development of its own batteries in-house and teaming up with ONE, gains in meeting technological advancement, quality, and production logistics have been expedited. Moreover, the deal should accelerate Bollinger Motors' mission to launch their Class 4 Chassis Cab, designed to hold 1 or 2 battery packs, depending on the customer's desired range needs, and Class 5 Platforms for walk-in van upfits. These packs are expected to be available for Bollinger's expected start of production in late 2023.
That news followed an announced reduction in debt.
Strengthening Its Balance Sheet
And investors responded as they should, sending shares higher after MULN announced eliminating $13 million in company debt, a reduction leaving them with less than $10 million left on the books. That's a significant decline from the $30 million indebtedness in 2021. But more than just a reduction in outstanding debt, the opportunity more focused on is MULN potentially becoming a debt-free company as early as 2023, which for an emerging EV company with several products about to hit the pavement, would be a distinction shared by few, if any, others.
Still, while operations are good now, they're expected to get better. There, accretive updates announced over the past few weeks could start to show their impact toward generating additional near-term income. Moreover, MULN is showing no signs of slowing ambition, consistently delivering news to the markets that expose a compelling investment proposition supported by more than accruing new revenues but also by harnessing the value inherent to recent deals. The sum of those parts leads many to believe that MULN is on the verge of transforming itself into an impactful EV sector player.
MULN A Go With I-GO
Frankly, from an intrinsic perspective alone, they already are. And a deal made last month adds appreciably to that consideration by positioning MULN for rapid revenue appreciation from an agreement with I-GO. Investors appear to think so. They sent shares higher by over 77% after MULN announced acquiring exclusive sales and marketing rights to sell the I-GO in particular European markets. Considering that the I-GO is described as a "perfect" electric vehicle for urban European markets and knowing that the MULN team is capable of tapping into its value, giving back gains may be leaving considerable value on the table, especially with the I-GO expected to fill a substantial niche last-mile services opportunity in those markets. But here's more good news.
MULN also announced an agreement to appoint Newgate Motor Group, one of Ireland's most recognized dealership groups, as the marketing, sales, distribution, and servicing agent for the Mullen I-GO in Ireland and the United Kingdom, a deal expected to expedite sales into those massive market channels and immediately strengthen the I-GO value proposition. Based on its specs, the I-GO is predicted to serve considerable demand.
Boasting a short but powerful 96-inch wheelbase, 16.5-kWh battery pack, rear-wheel drive, a curb weight of only 1,753 lbs., an NEDC estimated range of 124 miles per charge, and its ability to easily handle the stop/go and weave in/out typical of narrow European urban streets has made the I-GO a polling favorite as the vehicle choice for both last-mile delivery companies and consumers wanting convenience and value. That's no surprise. The I-GO was specifically built to meet market demands, designed to get to the customer's door faster and provide affordable in-town EV options while decreasing pollution and congestion levels across Europe.
With prices starting at $11,999 plus taxes and fees, demand for the I-GO could be enormous. And with the vehicles retailed and serviced through supporting local European distributors, another hurdle is cleared to accelerate adoption. Investors in MULN embraced the news, and short sellers, at least when the news was announced, not so much.
But here's the deal. Short-selling a company stock and not appreciating its products and opportunities are two different things. Thus, even the shorts may be willing to admit that the acquisition is a significant win for MULN. And once revenues begin to post, a long-played open short position may be enticed to cover sooner than later. Hence, this decline, with Tesla, General Motors (NYSE: GM), and Ford (NYSE: F) getting bullish EV-specific attention, may be short-lived.
More Than Just The I-GO
Mullen can justify that proposition. In addition to I-GO providing MULN with potentially massive new market opportunities, it extends its brand into other countries while also allowing them to remain focused on manufacturing its impressive EVs entirely in the USA. Those include MULN's current commercial vehicle lineup comprised of Class 1 and 2 EV cargo vans, Class 3 through Class 6 vehicles resulting from its majority acquisition of Bollinger Motors, and its Mullen FIVE series.
Incidentally, in addition to securing the exclusive sales, distribution, and branding rights for the I-GO in Spain, France, Germany, the UK, and Ireland, MULN said it also entered into an Asset Purchase Agreement to acquire all assets of Electric Last Mile Solutions, Inc. and Electric Last Mile, Inc. ("ELMS") from the ELMS Bankruptcy Estates. That deal can also considerably extend MULN's marketing and sales reach.
If so, it will be the start of transforming milestones into catalysts, and MULN scoring several in the past month alone positions the company for a near-term, news-based breakout. That's more than likely; it's probable. Paying attention to just those updates made since October, MULN went from a medium to long-term play to a near-term and compelling value proposition.
And recent weakness underscores the opportunity and further exposes a valuation disconnect between share price, portfolio assets, and inherent potential. But as noted, that's not altogether bad news; valuation disconnects reveal investment opportunities, and this recent decline may offer one too good to ignore.
A Value Proposition Exposed And In-Play
Remember, too, while several smallcap EV companies show promise, most don't have nearly the revenue-generating firepower or products inherent to MULN. Nor have they created an end-to-end ecosystem making "going electric" more accessible than ever to the millions of private-sector companies and public-sector consumers wanting the types of products Mullen sells now and plans to sell soon. MULN peers also lack overseas presence, a differentiator accrued after MULN inked its I-GO deal.
Still, it's not only about deals made. Mullen has an impressive lineup of its own, led by its "strikingly different" Mullen FIVE EV product family. It's a welcomed addition to the premium midsized electric-powered sport utility vehicle market. It's earning rave reviews from more than having good looks, too. In addition to what's been described as "stunningly designed and engineered," it's manufactured entirely in the USA. Still, that's only part of its appeal. Its timeless design and intuitive functionality also showcase power, going from zero to sixty in 3.2 seconds, positioning it at or near the top of many categories compared to competing vehicles' styles and performance. There's still more helping to place the FIVE into a class of its own.
It's also equipped with modern advancements like facial recognition technology, an integrated LED lighting system, voice command, and PERSONA, a personal vehicle assistant controlled via app managing preferences and security modes. That's led to consumer opinions overwhelmingly supportive of the car, placing it among the best in the space and earning competitive respect against Ford's Mach E/F, General Motors EVs, the Toyota bZ4X, and the Tesla Model Y. Those wanting to see it in action won't wait long. The first fully functional demonstrator vehicles of the Mullen FIVE EV Crossover began arriving this October, and that's just one vehicle launch in the queue.
More products are expected to roll out soon. MULN plans to bring its Mullen RS to market in Spring 2023, as well as a lineup of commercial fleet vehicles intending to seize a substantial share of the demand for last-mile delivery vehicles. And part of that market, and others, can be exploited through MULN's controlling interest in Bollinger Motors. That interest positions them ideally to capture share in several markets as one of the few offering electric chassis cabs and platforms in several vehicle classes. It immediately moves MULN into the medium-duty truck classes 3-6, along with the B1 and B2 sport utility trucks. Off-road videos of the Bollinger are impressive as well. So, don't think the leisure market isn't in play. It is.
Seizing Upon A Valuation Disconnect
If fact, MULN can target several potentially lucrative market opportunities. And with the groundwork laid to exploit those revenue-generating initiatives, MULN and its investors' fortunes could soon change. Currently, the share price looks like a lagging indicator, especially after MULN continues to combine parts to strengthen a compelling value opportunity today that can become an extraordinary one tomorrow. That's not hype; it's sentiment based on a series of updates showing MULN making the right moves to expedite sustainable revenue growth in the near term.
Those paying attention see MULN as an appreciably stronger company compared to a month ago. And to those that haven't been, the current may be the opportune time to learn more about this dynamic EV company and manufacturer.
Easy to learn is that in addition to enhanced revenue-generating opportunities in its crosshairs, MULN is led by a team able to capitalize on and maximize accretive opportunities. They may have scored EV gold when it acquired exclusivity to the I-GO, but reading between the lines shows that MULN does not appear close to a stopping point. And by reducing debt and allowing better use of its funds, more value-adding news could very well be in the queue. Therefore, trading ahead of that expectation may be a timely and justified consideration.
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