Mullen Automotive Inc.’s stock tumbled 22.5% to a fresh low on Thursday, after the electric vehicle company updated investors on its latest plan for a reverse stock split.
But the move likely had more to do with the selloff in Tesla Inc.’s stock
TSLA,
after a disappointing earnings report that sparked a rout for the overall sector.
See also: EV stocks hit fresh lows as Tesla shares suffer biggest 2-day selloff this year
Mullen
MULN,
said it would convene a special shareholder meeting on Dec. 15 to vote on the board’s proposal for a reverse stock split at an exchange ratio of between 1-for-2 and 1-for-100.
The move is aimed at giving the electric-vehicle company a stock price of at least $1 so it can comply with Nasdaq minimum listing requirements. Companies get notice from the Nasdaq if their stock trades below $1 for 30 business days, at which point they are given a grace period to regain compliance or face delisting.
Read: Opinion: Tesla’s Cybertruck has Elon Musk sounding unusually cautious.
Earlier this week, Mullen said it was on schedule to produce 150 Class 3, or light-duty, EV trucks by the end of the year. The company also said it was on track to begin Class 1 EV cargo-van production and deliveries in the fourth quarter of 2023.
The news failed to inspire investors, however, who sent the stock into what was then already record-low territory. The stock has closed below the $1 level every day since Aug. 16, even after the EV maker implemented a one-for-nine reverse stock split on Aug. 11.
The stock has fallen 99.6% in the year to date, while the S&P 500
SPX,
has gained 12%.
