California-based electric vehicle manufacturer Mullen Automotive (NASDAQ:MULN) offered a great deal of promise in 2020 and 2021. Since then, however, MULN stock has had steep capital losses.

A short-seller tried to warn prospective shareholders earlier this year. As it turns out, the short side of the trade was the right one, and there’s no reason to expect a turnaround anytime soon.

Mullen Automotive has nice-looking cars, but also a lot of unanswered questions. How is Mullen going to compete in an increasingly crowded EV manufacturing field? What are the company’s third-quarter financial results? When should people expect Mullen Automotive to turn a profit?

Mullen’s investors might have gotten caught up in the hype cycle last year, but now it’s time to face the facts. Sharp losses and deep value aren’t the same thing. Perhaps, the best option now is to find another EV maker to wager one’s hard-earned capital on.

MULN Stock Declined After Short Report

On April 6 short-seller Hindenburg Research issued a scathing report on Mullen Automotive. The share price of MULN stock was around $2.65 on that day.

What Mullen’s investors should demand, and ought to have demanded over the past half-year, is a direct and comprehensive response to Hindenburg’s allegations.

It’s certainly not a confidence-builder that Mullen Automotive CEO David Michery displayed a solid-state battery prototype cell with multiple visible dents in it (check Hindenburg’s report to see a photo of this).

Fast-forward to Nov. 23, and the company’s shares traded around 20 cents. Whether Hindenburg’s allegations were true or not is almost immaterial at this point. Indisputably, the short side of the trade was the right one.

Mullen Automotive Is in a Deep Financial Hole

Even if we ignore the Hindenburg short report, it’s still bothersome that Mullen Automotive hasn’t issued a recent quarterly earnings report. Unfortunately, Mullen’s most recently filed Form 10-Q covers the three-month period ended June 30.

In other words, there’s a bothersome lack of transparency when it comes to Mullen Automotive’s quarterly financial stats. And, the data that is available isn’t particularly encouraging.

“Since inception, we have incurred significant accumulated losses of approximately $278.9 million, and management expects to continue to incur operating losses over the near future,” the company wrote in its June quarter report.

Then, there’s the fact that Mullen’s net loss widened from around $6.4 million in the year-earlier quarter, to $18.2 million in the quarter that ended in June of this year. Mullen Automotive might call its vehicles “Strikingly Different,” but the company’s bottom-line financials are strikingly negative.

No Need to Invest in Mullen Automotive Now

MULN stock gets a “D” rating instead of an “F” because a turnaround isn’t impossible. However, it will require greater transparency from Mullen Automotive’s management.

A fresh quarterly financial report and a comprehensive response to Hindenburg’s claims would be a good start. Until those action steps are taken, it’s wise to refrain from investing in Mullen Automotive.

On the date of publication, neither Louis Navellier nor the InvestorPlace Research Staff member primarily responsible for this article held (either directly or indirectly) any positions in the securities mentioned in this article.