Mullen Automotive stock crash stuns investors with a reported $1.15 quadrillion loss. Is it real or a data glitch? Find out what really happened.
During the height of EV excitement in 2021–22, Mullen Automotive (NASDAQ: MULN) briefly reached a market capitalisation of over $470 million, fueled by a surge of buzz and strategic buyouts from Bollinger Motors and Electric Last Mile Solutions.
Yet by July 2025, that value had collapsed to just $1.6 million, with its stock near $0.15—evidencing a staggering 99.7% loss in market capitalisation.
This implosion sparked sensational headlines—like "$1.15 Quadrillion Gone"—though hyperbolic, they point to a near-total wealth wipeout for shareholders.
1. Unfunded Ambitions and Broken Promises
Mullen consistently promoted innovative EVs: the Dragonfly K50 supercar, Mullen FIVE SUV, Mullen Three, and Go delivery trucks. However, reality took a stark turn.
Testing failures, cancelled programs, and revelations from a Hindenburg-like Reddit-led investigation revealed that the Dragonfly was a rebadged Qiantu K50, and claims of in-progress EPA-certified production were false. Legal action followed, culminating in a $7.25 million settlement for shareholders.
2. Massive Financial Losses & Cash Burn
Despite revenue peaking at only $3 million in Q1 2025, Mullen reported a net loss of $114.9 million, driven largely by non-cash charges totalling $91 million. The company burned through ~$50 million per quarter, keeping it perpetually reliant on short-term financing.
In a dire attempt to restructure, Mullen eliminated $13 million in debt from an initial $30+ million—yet retained a fragile $10 million remaining liability.
3. Nano-Cap Illiquidity & Panicked Selling
A minuscule market cap of $1.6 million meant extreme illiquidity. A single large sell order or analyst downgrade would trigger cascading stop-losses—precisely what happened in June when a 25% plunge erased virtually all value in a month.
Technical traders confirm the crash came from breaches of psychological price support, triggering automated liquidations.
The claim of a "$1.15 quadrillion crash" stems from multiplying the former price by a huge number of assumed shares, but it's misleading. In reality:
The company has about 800,000 shares outstanding after the reverse split.
A shift from $0.57 to $0.15 in this tiny float wipes away tens of thousands, not trillions.
On June 2, Mullen carried out a 1-for-100 reverse stock split to preserve its Nasdaq listing and increase the share price above $1.
Despite briefly pushing the price to approximately $57 before the split, the stock ended its initial adjusted trading day down 32%. This drastic move failed to conceal deeper issues—the imbalance between technical tickers and operational reality.
1. Cash Burn & Survival Odds
With under $10 million in cash and ongoing monthly losses, Mullen is rapidly depleting its capital.
Securing Department of Energy grants or new strategic partnerships could offer relief, but reliance on non-dilutive funding remains precarious.
2. Execution Risk & Competitive Landscape
Despite the launch of the rejuvenated Bollinger B4 truck series and the introduction of crypto payments, Mullen remains at risk due to insufficient production capacity and competition from established EV manufacturers.
3. Nasdaq Threat & Market Confidence
Nasdaq requires a $1 bid price to be sustained for several consecutive days following a reverse split. Failure could lead to delisting—effectively erasing retail liquidity and further disincentivising investment.
In conclusion, was $1.15 quadrillion wiped out? No—instead, a handful of investors lost nearly 100% of what they invested. Mullen Automotive's decline highlights the risks of exaggerating stories, financial opacity, and market dynamics.
While its reverse split provided fleeting technical reprieve, it did nothing to change its fundamentals. For speculative penny-stock investors, MULN serves as a warning, instances of irreparable value loss caused by liquidity traps and rampant hype.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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