Shares of Mullen Automotive Inc. experienced a significant decline of 17.6% into record-low territory during afternoon trading on Monday. This dip came as investors anxiously awaited the outcome of a critical shareholder vote that could determine the fate of the company's stock listing on the Nasdaq.
Shareholder Vote and Revised Proposal
On Friday, the company announced its decision to hold a special meeting of shareholders on Monday. The purpose of this meeting was to vote on a proposal seeking to implement a reverse stock split. The reverse stock split, which could vary between 1-for-2 and 1-for-100, aimed to boost the stock price sufficiently to meet the Nasdaq's requirement of a minimum closing bid price of $1 for at least 20 consecutive trading sessions on or before January 22nd.
As of Friday, Mullen announced that it lacked enough votes to pass the reverse stock split proposal. At present, the stock lingers at approximately 11.95 cents and has traded below $1 per share since August 16th.
Potential Impact of a Reverse Stock Split
A reverse stock split intends to bolster the stock price by consolidating existing shares. For instance, if a 1-for-100 reverse split were implemented, the current share price would multiply by 100. Notably, the company had previously executed a 1-for-25 reverse split in May and a 1-for-9 reverse split in August, resulting in an effective multiplication of the stock by 225.
This year has been extraordinarily challenging for Mullen Automotive Inc., with the stock plummeting by 99.8%. Now, shareholders anxiously await the outcome of the vote, which could potentially impact the future course of this electric vehicle maker's stock and its position on the Nasdaq.