Key points:
- Mullen Automotive (MULN) stock edged higher on a bid for Last Mile Electric.
- The EV company wants to acquire the assets of the bankrupt competitor.
- Investors were unimpressed by the news, as seen in the muted reaction.
The Mullen Automotive Inc (NASDAQ: MULN) stock price edged higher after the company had submitted a stalking horse bid for the bankrupt Electric Last Mile Solutions Inc., worth almost $100 million.
The EV company is looking to acquire the bankrupt company’s assets, including a Hummer SUV factory in Indiana that is now defunct. However, Electric Last Mile’s administrators are open to receiving other competing bids for the company’s assets, with the deadline for submitting such bids being October 3, 2022.
Also read: The Best Electric Car Stocks To Buy.
The administrators will hold an auction for the assets on October 7, 2022, at which point we will know whether Mullen auto’s bid was successful. Investors barely reacted to the news, as evidenced by MULN’s stock price muted reaction.
Mullen Auto is struggling to distinguish itself in the crowded EV market dominated by Tesla, which is why investors were not impressed by the acquisition. However, as many astute investors know, acquiring another company is the bare minimum, and Mullen has to utilise the assets acquired to bring its products to the market.
The company is also acquiring a majority stake in Bollinger Motors, another competitor, in a cash-and-stock deal. However, investors were unimpressed by the news since a day after the news, Mullen auto’s stock price fell below the Nasdaq’s minimum listing requirement of $1.
Last Mile Electric’s administrators that about 245 parties had shown interest in acquiring the company’s assets, with 39 of them signing non-disclosure documents to perform their due diligence before deciding whether to make an offer for the company.
MULN stock has fallen 90.99% this year and is trading at its all-time lows. The stock does not show any signs of recovery at the moment; hence, I would stay away from it. However, the situation could change in the future.
*This is not investment advice.
Mullen Automotive (MULN) stock price chart.
The Mullen Automotive (MULN) stock price edged 1.13% higher on news of a potential acquisition.