Why did Mullen’s stock (MULN) rise 15% today?
Amid a market session that turned sour on Friday, the new electric vehicle (EV) Mullen Automotive (NASDAQ:MULN) again provided the fireworks. Although no company-specific news appears to have contributed to the 15% moonshot in MULN shares earlier this morning, investors could react to a major announcement yesterday. Additionally, speculative interest seems to be returning to the hot but risky electric vehicle maker.
As InvestorPlace Editor-in-chief Samuel O’Brient said Thursday that Mullen announced plans to bring his electric pickup trucks to Los Angeles International Airport (RELEASED). Specifically, Mullen entered into an agreement with the aviation service provider Menzies Aviation and electric vehicle charging company Global loop. Under the terms of the pilot program, the three entities will partner to provide Class 1 electric utility vans to LAX.
The pilot program, O’Brient noted, will last 60 days. Menzies intends to use Mullen’s vans for several airport service operations, including transporting cleaning crews to each aircraft. Additionally, Loop will provide the necessary equipment to charge each electric van between shifts.
Naturally, the disclosure represents a huge fundamental lift for MULN shares. David Michery, Mullen’s chairman and CEO, said in part that its commercial electric vehicles “…are a natural fit for airport services and logistics operations.”
Speculative interest rises for MULN shares
While any business venture could benefit from good news in the currently difficult circumstances, the LAX deal couldn’t have come at a better time for MULN shares. After starting 2023 auspiciously, MULN slipped into negative territory since the beginning of the year between January 17 and January 24. Now the shares are up about 30% for the year.
Despite the absence of any other news stories recently, it is possible that speculative interest in MULN shares has increased again. According to Fintel data, MULN’s short interest stands at 11.88% of the float. Its short interest rate is 0.85 days to cover. Although high by standard standards, traders can observe other compelling statistics.
First, short-term borrowing costs for MULN shares have increased significantly over the past few days. Fintel reports that on January 23, the cost of borrowing rate was 13.77%. A week later, that stat increased to around 20%. At last reading (about half an hour before press time), the short-term borrowing charge was 61.58%.
Additionally, the short stock availability metric for MULN stocks has seen extreme volatility. By Fintel, this line shows the number of shares available to be sold short in a major brokerage. For yesterday’s session, the metric reached 65,000 shares. Right now the number is zero.
why is it important
On January 11, TipRanks reported at the time that among investors surveyed, 1.1% of all portfolios held MULN stocks. Obviously, this group – which has seen its return in Mullen shares over the past 30 days reach just under 1% – called the sentiment “negative”.
On the other hand, 0.6% of a segment that TipRanks calls “top investors” held MULN stocks in their portfolios. Here, the sentiment sounded like “very positive”. Interestingly, in the last 30 days from January 11, the performance of this group has increased by 29%.
At the time of this writing, circumstances have changed significantly. According to TipRanks, 1.2% of all portfolios hold MULN stocks. For this group, the feeling is “very negative”. Over the past 30 days, its yield has fallen by an average of 2.5%.
More interestingly, sentiment among mainstream investors – who increased their holdings to 0.8% of all portfolios – was downgraded to “neutral”. Over the past month, their return to MULN shares has fallen half a percent. So even experts can get screwed with speculative companies like Mullen Automotive.
As of the date of publication, Josh Enomoto had no position (directly or indirectly) in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com Publication guidelines.