Why Is Mullen Automotive (MULN) Stock Down 20% Today?

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One particular of the additional risky stocks in the current market more than the previous thirty day period has been Mullen Automotive (NASDAQ:MULN), and right now, it would seem like brief sellers might be participating in a role. In truth, today’s volatility is to the draw back, with shares of MULN inventory dropping extra than 20% at the time of crafting.

The Mullen Five vehicle is displayed at the 2021 LA Auto Show media day in Los Angeles, November, 18, 2021. MULN stock.

Supply: Ringo Chiu / Shutterstock

Even so, it’s essential to put this transfer in context. A month in the past, MULN inventory was buying and selling down below 70 cents for every share. Subsequently, through a latest surge in battery-linked shares, MULN inventory appreciated to a lot more than $4 for each share on Monday, providing traders with a return of far more than 500% in about 4 weeks. Today’s drop follows very similar declines during the 7 days, which has brought MULN stock to the $2.40 amount, or down roughly 40% from its weekly peak.

These moves reveal that traders are using the momentum with this inventory, both of those to the upside and the downside. Let’s dive into just one of the critical factors that could be driving these moves.

What is Driving Volatility With MULN Stock?

Substantially of Mullen’s modern rise is tied to announced advancements with the company’s electric car battery tech. Investors have a number of catalysts to depend on that suggest this corporation has a brighter potential than its beaten-down valuation implies.

However, it’s also obvious that traders are viewing this stock as a one of a kind two-sided auto to make dollars in the quick time period. Specifically, shorter fascination with MULN inventory is remarkably high, at the moment sitting at about 36%. This significant amount of short curiosity has made a circumstance where by volatility could be the norm for some time.

That is for the reason that bulls may watch this stage of quick interest as a possible catalyst for a shorter squeeze. Short sellers may perhaps be emboldened by these figures, suggesting their thesis is proper. In either circumstance, this is obviously a polarizing stock. Appropriately, the wild swings we have viewed of late might be envisioned.

Relocating ahead, I think MULN inventory is probably to act a lot more as a investing auto than an investment. Accordingly, buyers may well want to be careful with this title appropriate now.

On the day of publication, Chris MacDonald did not have (both right or indirectly) any positions in the securities stated in this article. The views expressed in this posting are all those of the author, topic to the InvestorPlace.com Publishing Pointers.

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