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MULN: Why It's the Penny Stock of the Moment

Micro-cap EV maker Mullen Automotive is a hot topic on Reddit. Here's why MULN stock is the penny-stock play of the moment.

Mullen Automotive  (MULN)  is an electric vehicle (EV) company that also operates CarHub, an artificial intelligence-based platform that lets users buy and sell cars.

Currently with a market cap of $60 million, the micro-cap has caught the attention of Redditors. This has led to a sharp increase in daily trading volume and helped to boost the stock's performance more than 40% in the past five trading days.

Here's a closer look at the "penny-meme" stock of the moment.

Figure 1: MULN: Why It's the Penny Stock of the Moment

Figure 1: MULN: Why It's the Penny Stock of the Moment

(Read more from Wall Street Memes: Tesla Stock: 2022 Is The Moment Of Truth)

Why Is There So Much Buzz About Mullen?

Unlike some other meme stocks, Mullen's recent surge isn't due to a short squeeze. Although there have been reports that short-selling activity has increased considerably in the last few days, MULN's gains are the result of retail investors buying a large volume of the stock.

In the last 10 days, Mullen's popularity on social media has led to a spike in trading volume. Currently, Mullen has a modest float of 1.8 million shares but a 10-day average trading volume north of 240 million.

Mullen has been given intense exposure on sites like Reddit and Fintwit. On March 14, MULN was one of the top five most discussed tickers on Reddit — more popular than even Apple  (AAPL) - Get Free Report. Not bad for a penny stock.

Figure 2: Trending Stocks on Reddit in the past 24 hours.

Figure 2: Trending Stocks on Reddit in the past 24 hours.

The recent buzz around Mullen is due mainly to the company's announcement regarding the development of next-generation solid-state polymer batteries. Mullen says its technology is a major advance over the current lineup of lithium-ion batteries.

Also, keep in mind that the company went public relatively recently, on November 5, 2021. Since then, its stock has lost more than 90% of its value due to concerns over inflation and interest rates, which have especially hurt tech and growth stocks.

Is There Still Time to Join the Fun?

It's extremely difficult to anticipate how long a stock like this will remain a momentum play. The current stock market environment has been terrible for tech and growth stocks, particularly highly speculative stocks like EV companies.

Mullen's polymer battery development should be an important step toward long-term growth. In addition, the company has an interesting retail strategy and manufacturing plans. And Mullen recently announced a series of partnerships for the engineering and production of EVs.

This startup is still in its early stages. Its stock is down more than 90% from its debut price and has received very little Wall Street coverage. Therefore, even minor business updates can provide short-term growth. It's possible announcements could send Mullen shares back up to their IPO price.

(Disclaimers: this is not investment advice. The author may be long one or more stocks mentioned in this report. Also, the article may contain affiliate links. These partnerships do not influence editorial content. Thanks for supporting Wall Street Memes)