![]() ![]() Hindenburg also alleged user counts which ballooned during the pandemic ignored "widespread fraudulent accounts and payments." "But artists are not rapping about Cash App's smooth user interface - many describe using it to scam, traffic drugs or even pay for murder." If we ever do publish commentary on a low-volume stock that may be affected by our commentary, we demand that ’s writers disclose this fact and warn readers of the risks."CEO Dorsey has touted how Cash App is in hundreds of hip hop songs as evidence of its appeal," the report says. That’s because these “penny stocks” are frequently the playground for scam artists and market manipulators. On Penny Stocks and Low-Volume Stocks: With only the rarest exceptions, InvestorPlace does not publish commentary about companies that have a market cap of less than $100 million or trade less than 100,000 shares each day. Therefore, dark clouds may hang over Mullen unless it provides reasonable solutions. Should MULN stock continue to underperform, the embattled EV maker risks more stakeholders filing suit. In late June of last year, shareholders sued the company for failing to disclose information about CEO David Michery’s “ outsized and unfair” award. It’s not the first time Mullen found itself in hot legal water. Still, if the plaintiffs succeed in their litigation, it could also put the brakes on the aforementioned reverse stock split proposal. Unfortunately, as others have pointed out, MULN stock brings on the exhilaration but fundamentally lacks substance. However, unless a clear catalyst exists to justify such a proposed change, investors may lose interest. To be sure, a reverse split doesn’t spell automatic doom. As a Bloomberg article published yesterday unceremoniously described, Mullen is “ drowning its investors in shares.” The current share count stands at almost 1.7 billion when it tallied to fewer than 25 million a year ago. Most prominently, though, a reverse split at this point seems purely a cynical attempt to keep MULN stock listed on the Nasdaq exchange. Moreover, reverse splits tend to be associated with low-priced, high-risk ventures. Fundamentally, as both the SEC and the Financial Industry Regulatory Authority (FINRA) warned, while reverse splits may raise visibility for the target companies, they’re also less common among established enterprises. Naturally, such a proposal likely risks a deleterious impact on MULN stock. Previously, as InvestorPlace contributor Dana Blankenhorn mentioned, Mullen attempted to secure a reverse split on Dec. 23, 2022 revealed in the upcoming special meeting, the company sought to discuss a reverse stock split proposal. Naturally, the uncertainty over the legal conflict sparked anxieties for MULN stock.įurther, a Form 8-K document that Mullen filed on Dec. 23.Įffectively, then, the Court of Chancery will legitimize either Mullen’s or the plaintiffs’ position. The date for this hearing is scheduled for Jan. However, to cover the potential legal gaps, the EV maker intends to ratify the 2022 Certificate Amendment with a Delaware Court of Chancery filing, as White mentioned. On the other end, Mullen’s management team denies wrongdoing in the matter. Based on this assessment, the proposal to increase authorized shares at said meeting should not have passed. Essentially, the plaintiffs claim the number of common shares issued and outstanding as of the annual shareholder meeting, which occurred on July 26, 2022, was 477.51 million. Securities and Exchange Commission (SEC) revealed that “the shareholder meeting concerns two putative stockholder class actions filed against the company in December.” Specifically, White notes, “the complaints from these plaintiffs have to do with the increase in outstanding shares that occurred during the Jannual meeting of stockholders.”Īt the heart of the litigation is the legitimacy of Mullen’s prior actions to dilute the pool of MULN stock. Apparently lacking impetus, investors now look to management for substantive guidance.Īs InvestorPlace writer William White stated, a filing with the U.S. Mere minutes away from a special shareholder meeting – which will primarily discuss litigation affecting Mullen – MULN stock dipped sharply. Providing no shortage of excitement, the intense adrenaline rush that bolstered electric vehicle (EV) manufacturer Mullen Automotive (NASDAQ: MULN) earlier this year appears to have finally caught up with the company. InvestorPlace - Stock Market News, Stock Advice & Trading Tips ![]()
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