Another catalyst for Mullen Automotive Stock

Investors are watching Mullen Automotive (NASDAQ: MULN) will know that he just partnered with Rapid Response Defense Solutions and that’s good news. Rapid Response Defense Solutions is a leading government contractor specializing in small business partnerships. It has just won a new contract to supply the US government with light electric vehicles over the next few years. The deal is worth about $2.7 billion over the next 60 months and could significantly boost Mullen Automotive’s revenue. The GSA Fleet Vehicle Purchase Program produces an average of more than 50,000 new vehicles per year, and Mullen is in a unique position as the only manufacturer with a Class 1 option.

“With the Federal Government’s strong interest in electrifying a growing portion of its vehicle fleet, Mullen’s business portfolio is very well positioned,” said RRDS SVP – Federal Fred Bouman. “Mullen’s Class 1 EV van will be launched this year and will be the only Class 1 EV van on the market. It is 100% electrified, making it a great choice for federal government businesses.

Mullen Automotive realizes its plans

This latest development indicates that CEO David Michery is executing plans and building momentum for the company. This opportunity came to light thanks to Ron Dixon, the new recruit and head of government sales. Mr. Dixon was responsible for government sales at GM, so he comes to the table with experience and contacts within the industry.

The caveat is that Mullen is not the “exclusive” partner as he claims in his press release, but one of many partners who will meet the government’s demand for electric vehicles. The bottom line is that Mullen has developed another visible path to revenue that will help him succeed once production begins. As for production, the company has teased the market with a video and photos of its Class 1 pickup truck sitting in the Tunica factory, but it’s not yet clear when production will begin.

“RRDS is about providing solutions to the federal government,” said Mullen’s Director of Government Sales, Ronald Dixon. “…In addition, RRDS will be a key vehicle supplier to the General Services Administration under a 5-year, multi-billion dollar vehicle contract. We are focused on selling our EV products to the federal government and view this relationship as a strategic step in achieving that goal. »

Ahead of this news, Mullen revealed a partnership with Loop Industries (NASDAQ: LOOP) and Menzies Aviation. Mullen and Loop have been exploring ways to grow their businesses together, and Menzies Aviation is a path towards that goal. Menzies, the world’s largest airport service provider, explores the use of electric vehicles and Loop’s fleet service tools. The test is underway at LAX and could result in sales and business affirmation for Mullen and Loop.

Mullen’s deadline is near

Mullen investors will also know that March 6 is the deadline for shares to break above the $1 mark. This threshold to maintain a NASDAQ listing may lead to a stock split if the company cannot cross it. The next piece of news will likely be a request for a deadline extension, which gives the company an additional 6 months to meet the listing requirements.

The reverse stock split has been approved by shareholders and will be left to the discretion of the Board of Directors. There is speculation that such a move could trigger a short squeeze, but the only guarantee is volatility. Short interest in this stock is very high, over 50%, and has set it up for compression, but without good news to support a rally, short sellers are more likely to reposition at lower prices. higher than walking away from that market. .

The technical outlook: Mullen at rock bottom, no rally yet

Mullen Automotive shares appear to be at an all-time low, but there’s not enough meat in the story yet to sustain a rally. At best, the stock will continue to move sideways as the bulls and bears battle it out. A rally may begin when the company announces production, vans, and sales. The rally can be substantial if he secures a firm order from one of his many potential buyers.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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