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Time is ticking for shares of Mullen Automotive (NASDAQ:MULN) to close at or above $1. Yesterday, the electric vehicle (EV) company announced that it now has until Jan. 22 for its shares to close at or above $1 for 20 consecutive trading sessions. The Nasdaq Hearings Panel issued this deadline. A failure to accomplish this could result in MULN stock being delisted from the Nasdaq.
The Nasdaq Hearings Panel also informed Mullen that it has until March 8 to hold an annual shareholder meeting. Mullen last held its annual shareholder meeting on Aug. 3, although the meeting was deemed ineligible based on Nasdaq’s standards because the company did not allow shareholders to ask Mullen’s management questions about the business. This compliance issue is not material for the company, as it can be easily alleviated. The $1 minimum bid requirement is another story.
Can MULN Stock Reach $1?
It seems that Mullen already has a plan to reach $1, as the company recently proposed a reverse stock split in a range between 1-for-2 and 1-for-100 at its upcoming special meeting of stockholders on Dec. 15. The company made it clear that it only plans on enacting a reverse split if its shares can not reach $1 organically.
In 2023, Mullen has already reverse split its shares in a cumulative ratio of 1-for-225 following a 1-for-25 and 1-for-9 reverse split. An additional 1-for-2 reverse split would take that ratio to 1-for-450.
Based on Nasdaq policies, companies that have reverse split their shares in a cumulative ratio of 1-for-250 or more during the past two years are ineligible to receive a compliance period “and the Listing Qualifications Department shall issue a Staff Delisting Determination under Rule 5810 with respect to that security.”
Mullen also provided a bleak warning in its press release documenting the new deadlines:
“Examples of such risks and uncertainties include but are not limited whether the Nasdaq Listing and Hearing Review Council will review and if so, uphold the decision made by the Panel and whether the Company will be successful in regaining and maintaining Nasdaq listing compliance.”
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On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.