BREA, Calif. - Mullen Automotive, Inc. (NASDAQ: NASDAQ:MULN), an electric vehicle manufacturer, announced today that its Board of Directors has unanimously adopted a stockholder rights plan, effective immediately and set to expire on May 1, 2025. The plan is aimed at ensuring fair and equal treatment for all stockholders and to prevent any single stockholder or group from gaining control of the company without offering a premium to all stockholders.
The rights plan, commonly referred to as a "poison pill," would be triggered if an individual or group acquires 10% or more of Mullen's common stock without board approval, potentially diluting the ownership interest of the acquiring person or group. This strategy is often used by companies to defend against hostile takeover attempts.
Mullen Automotive, based in Southern California, operates two vehicle plants in the United States and has recently started production of commercial electric vehicles. The company's vehicles, including the Mullen ONE and Mullen THREE, have received certifications from the California Air Resource Board (CARB) and the Environmental Protection Agency (EPA), and are eligible for federal EV tax credits.
The rights plan does not involve the issuance of any new shares of common or preferred stock, warrants, or convertible notes as part of the dividend distribution of the rights. Further details about the rights plan are included in a Form 8-K filed with the U.S. Securities and Exchange Commission, which is expected to be available later today.
This announcement is based on a press release statement and contains forward-looking statements, which are subject to risks and uncertainties. The effectiveness of the rights plan in protecting stockholder interests has not been proven and is based on the company's expectations and predictions.
InvestingPro Insights
Mullen Automotive's recent adoption of a "poison pill" strategy reflects its commitment to safeguarding shareholder interests amidst the dynamic landscape of the electric vehicle industry. In light of this development, it's worth noting some key financial metrics and InvestingPro Tips that may provide a deeper understanding of the company's current market position.
With a market capitalization of $27.29 million, Mullen Automotive is navigating through challenging financial waters, as evidenced by a negative Price/Earnings (P/E) ratio of -0.01 and an adjusted P/E ratio for the last twelve months as of Q1 2024 at -0.05. The company's stock has experienced significant volatility, with a 1-week total price return of -27.19% and a staggering 1-year total price return of -99.69%, highlighting the high-risk nature of the investment.
InvestingPro Tips suggest that Mullen Automotive is trading at a low Price/Book multiple of 0.13, which could indicate that the stock is undervalued relative to its book value. However, the company is also quickly burning through cash, with a gross profit margin of -458.51% for the last twelve months as of Q1 2024, raising concerns about its financial sustainability. Additionally, management's aggressive share buyback could be a sign of confidence in the company's future prospects or a strategic move to influence the stock price.
For investors interested in the electric vehicle sector, these insights may be crucial for making informed decisions. There are 17 additional InvestingPro Tips available for Mullen Automotive, which can be accessed through InvestingPro. To enhance your investment research, use the coupon code PRONEWS24 to receive an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
Finally, the company's next earnings date is set for May 15, 2024, which could provide further indicators of its operational performance and strategic direction. With InvestingPro's comprehensive analysis, investors can stay up-to-date with Mullen Automotive's financial health and market potential.
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