MULN stock falls, going against the grain on Friday

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• Mullen held its shareholder meeting on August 3 but it is unclear whether the company received enough votes for another reverse stock split.
• July US Nonfarm Payrolls surprised to the downside – weighing on the US Dollar but supporting stocks.
• S&P 500 and NASDAQ 100 both gain in early Friday trade

Mullen Automotive (MULN) stock slumped nearly 10% on Friday despite the broader averages advancing at a healthy clip. The poor showing comes a day after MULN stock added 12%, closing at $0.1365. 

The US Nonfarm Payrolls data came in below expectations. This was largely seen as positive by the equity market as it makes a September interest rate hike by the Federal Reserve (Fed) somewhat less likely, and higher interest rates hurt businesses by increasing borrowing costs. 

Mullen stock news: Nonfarm Payrolls reduce chance of September rate hike

US Nonfarm Payrolls for July came in at 187K, below the 200K expected by analysts. Additionally, the previous month’s 209K was revised down to 185K. 

Usually, a lower reading would be worrying to the stock market, but this time the market is taking it as a reason to rejoice. While Fed Chair, Jerome Powell, remained open to another rate hike later this year he has hinted that further disinflationary data would make such a move less necessary. 

This month’s NFP unveiling certainly did that. The so-far tight labor market had concerned Fed officials in that it could imply the making of a wage-price spiral. Although the headline NFP figure missed estimates, the US Unemployment Rate for July did tick lower from 3.6% to 3.5%, and wage gains also did not help the picture so much. This might be why the market is somewhat tentative about the results.

In point of fact, the Average Hourly Earnings reported as part of the NFP remained flat with June at 0.4% MoM and 4.4% YoY. Analysts had expected these figures to fall slightly in July’s reading.

Mullen stock news: Shareholder meeting rumors

Mullen has not yet reported or filed any documents with the Securities & Exchange Commission (SEC) regarding the details of its August 3 shareholder meeting. Rumors have been circulating online, however, that Proposal 3 passed. This would allow Mullen to effect a reverse stock split at any ratio between 1-for-2 and 1-for-100. The company needs to place its share price above $1 for 10 consecutive trading sessions by September 5 in order to satisfy the NASDAQ Exchange’s bylaws.