$0.13 per share. $0.12 per share. $0.11 per share. With Mullen Automotive’s (NASDAQ:MULN) share price touching multiple all-time lows this week, the company’s press department has shifted into overdrive, issuing two new press releases over the past week.
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In the most recent PR, Mullen — which has no cars to sell of its own just yet — announced it has obtained a license and “exclusive distribution rights” to assemble Qiantu K50 “DragonFLY” electric “supercars” from China’s Qiantu Motors for sale in North and South America.
Well and good. Mullen says the new cars will accelerate from 0 to 60 in 1.95 seconds and hit top speeds of over 200 mph once Mullen company finishes its work to “re-engineer and re-design the product to meet homologation requirements for U.S. certification.” That accomplished, Mullen plans to sell the EVs under the “Mullen GT and “GTRS” model brand names.
Of course, in order for Mullen to do this, it first has to stay in business long enough for the re-engineering, re-designing — and production! — work to be done. So what are the chances of that happening?
Funny you should ask that, because Mullen’s staying power was actually the subject of management’s other press release. To wit, last Thursday Mullen CEO David Michery released a statement addressing shareholder concerns about Mullen’s product pipeline, demand for its products, and its financial position.
According to Michery, Class 1 commercial electric van deliveries will be beginning shortly, and in fact before the end of this month, including work to satisfy a $200 million, 6,000-van order from North Carolina car dealer Randy Marion Automotive Group. Michery didn’t say how long it will take to fulfill the entire order, exactly, but even partial fulfillment should do wonders for the company’s profit-and-loss statement, catapulting top line revenues from a grand total of $0, zero cents, to… well, something more than that (up to and hopefully including $200 million).
In the meantime, Mullen continues burning cash at the rate of $86 million-per year (at last report). That may sound like a lot (because it is), but Michery assured shareholders that with $87.4 million in the bank at present, the company certainly has enough cash on hand to survive for another year. What’s more, Michery says Mullen has “an additional $110 million from firm commitments” coming in “by June 1, 2023”.
It’s not 100% clear what these “firm commitments” are — whether firm orders from Randy Mario Automotive Group, or others, or financing deals from Mullen’s backers. Wherever the money is coming from, though, Michery argues that Mullen now has “all the pieces in place between our product, factories and strategic expertise to execute on our plans to deliver our Class 1 and Class 3 vehicles this year.”
Meanwhile, MULN has a Smart Score of 1 on TipRanks, meaning that it is likely to underperform the market. (See MULN stock analysis)
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