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MULN stock alert: Mullen plunges to new 52-week low below 9 cents


Source: Sam Leigh. Shutterstock.com

Electric vehicle (EV) manufacturer Mullen Automotive (NASDAQ:MULN) is suffering from visible erosion on Tuesday. Already known for its volatility, MULN stock fell slightly below 9 cents earlier in the day. Sitting on a 52-week low, the company has also filed a lawsuit against a media company, which can be a risky move.

According to Mullen’s press release, the upstart EV filed suit against Intersection Media Group:

“[Mullen] today filed a civil defamation lawsuit in Delaware Superior Court alleging that on March 22, 2023, dot.LA published an article on its website authored by David Shultz that contained false and defamatory statements regarding Mullen, including false and defamatory statements regarding the terms of a civil action settlement agreement.

Intersection Media Group does business as dot.LA, which covers established tech stalwarts and startups. The news site has frequently covered Mullen and his various struggles. However, the outlet’s recent coverage of a contract dispute between the electric vehicle company and Qiantu apparently wronged Mullen’s management team.

At first glance, this may seem like a win for MULN stocks, with the lawsuit underscoring the potential harm of misinformation to companies. Nevertheless, the market seems to understand that this question is also a two-way street.

Libel lawsuit poses risks to MULN stocks

At this time, it’s unclear what specific grievances Mullen has with the article. However, an editor’s note at the end of the article in question now states that the article “has been edited to provide a more accurate description of the financial terms of the settlement between Qiantu and Mullen.”

In its current form, the article also seems to align with the essential facts about the Mullen-Qiantu dispute. For example, Shultz cites court documents and filings with the U.S. Securities and Exchange Commission (SEC) to establish his report. As a result, the defamation suit may fall flat, due to what appears to be a lack of malicious intent.

According PBSpublic officials and public figures (which may include well-known businesses) acting as plaintiffs in a defamation suit must demonstrate “that the defendant acted with actual malice in publishing the defamatory statement”. PBS further note:

“The actual malice standard means the plaintiff must prove that you (1) knew the defamatory statement was untrue; or (2) acted with a reckless disregard for the truth – in other words, that you had serious doubts as to the truthfulness of the statement.

Of course, anyone betting on MULN stocks should watch this issue closely. It is also important to recognize that defamation suits can backfire on you. Specifically, if the public views Mullen’s actions as “oppressive or contrary to free speech,” the company could ironically besmirch the reputation it was originally trying to protect.

why is it important

That’s not the only issue plaguing MULN stock. Mullen has also struggled to meet deadlines and such before. For example, last June CEO David Michery promised to reveal “everything” about the delivery of an electric pickup truck to a mysterious Fortune 500 company. However, when the stated deadline passed, no updates came. is materialized.

Maybe they were small potatoes back then. But the now brutal erosion of MULN’s shares combined with the lawsuit decision may give the company an unfavorable image. Investors should therefore exercise caution with this manufacturer of electric vehicles.

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As of the date of publication, Josh Enomoto has not held (directly or indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.

A former senior business analyst for Sony Electronics, Josh Enomoto helped negotiate major contracts with Fortune Global 500 companies. Over the past several years, he has provided critical and unique insights to investment markets, as well as various other industries including law, construction management and healthcare.

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