Apparently post got removed as spam. Hoping it was auto and mods can reinstate. Either way, here’s the content. Seems like Muln got handed a Lemon.
Actual information on the Bollinger deal is light to non-existent. Shall we crowdsource info and see what we end up with? I’m happy to keep this post updated as links come in. Feel free to share your own analysis too. One request though - please keeps things reasonably close to reality.
Possible synergy between two companies that are focused on the commercial EV segment - potentially covering class 1 to 6 between the two.
Bollinger has some IP too which might be beneficial to Muln.
The EV segment is now very mature and hypercompetitive; JVs and mergers are common when this happens in any industry. Good to see Muln being realistic.
Reasons for reservation:
$142M in cash and stock sounds … expensive. Muln’s market cap is ~$340M. The dilution and the cash burn will be real.
Essentially nothing has been presented in terms of how this is synergistic. For an example of a good case for synergy, check out CVNA and Adesa. That’s still a dodgy deal, but someone actually put two spreadsheets together there.
Muln tried partnerships to bring EVs to the US twice already. Unclear why third time will be lucky, after Coda and Dragonfly.
Bollinger isn’t being acquired - a controlling interest is a little more arms length, and requires some more legwork in terms of sharing IP, resources, facilities etc. Bollinger is private though so less pain than a public company.
That press conference was just PR. The questions were curated softballs, and nothing material was said.
The stock price action was telling - Muln aficionadoes of course bought up the news, but then got dunked on by folks who actually took a moment to digest the details of this partnership (or lack thereof).
Bullshit alert #1: The 50,000 reservations of B1 and B2 might not even exist. Bollinger had noted they are stopping making those trucks, and are pivoting to commercial vans. This needs verifying.
Bullshit alert #2: Muln PR had to tag Apple in their IG post… it is done by influencers who want to ride the coattails of popular tags as it generates traffic from algos. It’s petty and cheap, and has the waft of desperation.
Overall, it is unclear to me why this is $142M well spent, and how Bollinger is not a lemon.
Looking forward to your constructive contributions!
Looks like more dunking in progress. Down another 13% today.
That purchase of 142mil when they only have 60mil or so in cash means a decent amount will be in stock instead.
So if we say $30mil will be in cash and the remaining $112mil in stock, at $0.60 per share, that comes out to what 180mil+ shares? If my math and reasoning lines up?
MULN has 509mil shares outstanding. Dilute it with 180mil shares which is like 1/3 of the current total shares… Might explain the drop?
He can get up to 10% of the shares without generating a single penny or delivering a single unit of production. But the glorified water bottle he recently made a deal for will count.
A. VEHICLE DELIVERY MILESTONES: For each vehicle delivery milestone set forth below that is satisfied within the performance period specified, the Company will issue to Participant a number of shares of Common Stock equal to 2% of Mullen’s then-current total issued and outstanding shares of Common Stock: (i) Delivery of Mullen’s Class One Van to customers for a pilot program under the captured fleet exemption by the end of December 2022; (ii) Procuring full USA certification and homologation for the sale and delivery of its Class One Van by end of August 2023; (iii) Full USA certification and homologation of the Dragonfly RS sports car by August 2024; (iv) Producing a drivable prototype of its Mullen 5 vehicle for consumers to test by end of October 2023; and (v) Producing a drivable prototype of its Mullen 5 RS High Performance vehicle for consumers to test by end of January 2023.
B. CAPITAL BENCHMARK MILESTONES: For each $100 Million raised (a “Capital Tranche”), and subject to an aggregate maximum of raised of $1.0 Billion in equity or debt financing between the Date of Grant and the end of July 2024, the Company will issue to Participant a number of shares of Common Stock equal to 1% of Mullen’s then-current total issued and outstanding shares of Common Stock as of the date a Capital Tranche is achieved. Additionally, if Mullen (“MULN”) is included in the Russel Index, which serves as a leading benchmark for institutional investors, the Company will issue to Participant a number of shares of Common Stock equal to 2% of Mullen’s then-current total issued and outstanding shares as of the date Mullen is approved to be included on the Russel Index.
C. FEATURE MILESTONE. If Mullen enters into a supply, purchase or other agreement with a manufacturer or provider of equipment, accessory, feature or other product (collectively, “Feature”) by the end of 2023 that sets Mullen or its vehicle apart from its competitors or that provides Mullen a first mover or first disclosure advantage over its competitors for the Feature, the Company will issue to Participant a number of shares of Common Stock equal to 5% of Mullen’s then-current total issued and outstanding shares of Common Stock as of date the Feature milestone is achieved.
D. DISTRIBUTION MILESTONE: If Mullen meets the vehicle distribution milestones set forth below by entering into a joint venture or other distribution agreement by the end of 2024, the Company will issue to Participant a number of shares of Common Stock equal to 2% of Mullen’s then-current total issued and outstanding shares of Common Stock for each of the following vehicle delivery milestones achieved: (i) agreement with an established local, USA dealer or franchise network; and (ii) agreement with an established Latin American or other non-USA based dealer or franchise network.
Thank you for sharing this math on Muln’s cash position in TF, @Shadowstars :
60.9mil Cash on hand from previous 10-Q. Along with the 43mil coming in from Pref stock and warrants. So nearly 104 mil of cash. Of which 15mil was paid to Bollinger with 30mil in escrow until the deal finalizes in May 2023. Then to sellers directly another 10mil with another 20mil in escrow. Thats 75mil tied up out of 104mil they have coming in for this year.
@bigglyoptionoligist and I will see if we can get into CCs on this, as the IV is high enough to return ~ 50% in a 4 month period (Jan 2023). Of course, this sounds too good to be true, so needs some looking into.
Once we get comfortable, we could try getting the underlying for lower and then sell the call for higher when price spikes a bit, but for now, this seems like a safer option.
If we have any CC experts in house, would love advice or feedback! First CC written ever.
Seems like a pretty good situation if it stays afloat here. Basically buying the stock at roughly $0.51 and selling it back at $0.50 but with a $0.25 premium per.
The thing to be cautious with is a reverse split. I used to farm theta until I got burnt too many times (underlying stock dropped too much and selling CCs became pointless or reverse split like MNMD @ 15:1), but it also wasn’t on penny stocks. I made a lot of money on GME covered calls as well as SAVA though, and only had one call assigned on GME @$280 when my cost basis was $22. The typical CC is to sell for 30-45 days out and buy to close at 50%, so your Jan 2023 expiry is unusual. I think you need to see if you can BTC in less than .05 increments, unless the goal is to get assigned? Also, will you be unhappy if it somehow goes up to $2/share?
Thanks Kryptek - was looking at closer strikes too and get set this up after, splitting it between Sep and Jan. Because Sep could be 0.10. Perhaps all in Oct is a better way to go. Will check out the profit profile
Excellent thank you @The_Ni appreciate you for doing this for science. I have not done covered calls in the past though I own a few hundred shares of multiple tickers and was always too big a puss to do anything like this. I will join in MULN and consider all that you did as well as @Fllwoman@Kryptek and the others. Not looking to really do much other than see how it works and gain a comfort for it. I have strangled Costco and a few others before but that’s it outside of outs and calls and shares. Thanks guys for endeavoring in this for any noobs who haven’t done it before
Missed this post earlier, @Fllwoman - the 30-45DTE and close-on-50% are great benchmarks. Will calibrate to that. Thanks!
And nope, won’t be unhappy at all if it rockets to $2 or higher. This ticker has nothing going for it, so if anything, it gives us an opportunity to short it at those heights.
