Mullen Automotive (NASDAQ:MULN) stock is surging higher by more than 6% after the company announced that it had acquired battery pack production assets from Romeo Power for approximately $3.5 million. These assets include electric vehicle (EV) pack assembly production lines, battery testing equipment, “precision R&D module and pack development with associated inventory allowing for production of modules and vehicle battery packs” and more.
The acquisition follows Mullen’s failed plans with Lawrence Hardge to develop the energy management module (EMM). The EMM could purportedly increase the range of any EV battery.
“Purchasing the Romeo assets is consistent with our battery pack production path and previous announcements for our high voltage facility in Monrovia,” said CEO and Chairman David Michery. “Overall, this purchase further enhances our capabilities for battery pack production right here in California and the U.S.”
MULN Stock: Mullen Acquires Battery Assets From Romeo Power
While not directly mentioned in Mullen’s press release, the company likely purchased Romeo’s battery assets from Nikola (NASDAQ:NKLA). In August 2022, Nikola agreed to acquire Romeo for approximately $144 million. That means that Mullen received a major discount in its acquisition of Romeo’s battery assets.
However, Romeo Power could be the culprit behind Nikola’s (NASDAQ:NKLA) recent truck fires. Last Friday, Nikola announced that one of its trucks had caught fire while the company was testing it for the cause of previous fires. This was Nikola’s fourth truck fire incident in four months. In August, the company announced that it would suspend sales and recall all 209 battery-powered electric trucks that it had distributed. Through an internal investigation, Nikola noted that a single supplier component in the battery pack likely caused a coolant leak, which resulted in a fire.
Mullen’s acquisition quickly caught the attention of Hindenburg Research’s founder, Nate Anderson. Anderson has issued short reports on both Nikola and Mullen in the past and posted this statement following the news:
Nikola bought battery maker Romeo Power for $144 million less than 1 year ago.
The batteries have been setting themselves on fire for months.$NKLA just sold Romeo for $3.5 million, solidifying a major loss.
— Nate Anderson (@NateHindenburg) September 11, 2023
Back in June, Electrek published a report on Romeo’s batteries. The publication noted that Romeo’s engineering executives had recommended the company to shut down production of its Hermes modules, although Romeo’s CEO at the time insisted on simultaneously continuing production and trying to fixing the issue.
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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.