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One struggling electric vehicle (EV) startup is looking to acquire another that is struggling even more. Mullen Automotive (NASDAQ:MULN) hasn't seen actual momentum in months despite its recent acquisitions and partnerships. Many experts remain bearish on MULN stock, leaning in favor of its larger competitors who are actually putting EVs on the road. But Mullen has made it clear that it isn't giving up. Today it announced a bid to acquire a competitor, one that has fallen even further over the past six months than Mullen itself. That's likely because the company in question declared bankruptcy in June 2022.

Electric Last Mile Solutions (OTCMKTS:ELMS) has shed almost 100% of its value since March 2022. Its name would have easily been forgotten by Wall Street a long time ago. But ELMS happened to declare bankruptcy just as Revlon's (NYSE:REV) status as a bankrupt company led to a massive short squeeze. ELMS surged 180% as investors speculated that it could be the next bankruptcy squeeze play. But just as quickly as it rose, ELMS stock plunged back into the red. Since then, it has seen no growth. So, what does Mullen want with the company? Let's take a closer look.

What It Means for MULN Stock

Mullen is a company that has no trouble staying in the public eye but still can't generate any actual growth. That's not for the company's lack of trying. Mullen started the month off with an announcement that it would be introducing water-from-air solutions to its EVs. This partnership with Watergen did not help boost shares, though, nor did Mullen's purchase of a controlling stake in Bollinger Motors. While MULN stock is up on today's news, that doesn't necessarily mean that the pending deal will help turn the company around.

It is important for investors to note that the deal in question is not finalized. While Mullen has expressed interest, it has more than two weeks to be outbid. As Bloomberg reports:

Mullen agreed to a stalking horse bid of "almost $100 million in total consideration," according to a Sept. 16 filing by the trustee in Electric Last Mile's Chapter 7 case. Competing bids are due by Oct. 3, and an auction will be held Oct. 7.

According to TechCrunch, Mullen is presently the highest bidder for Electric Last Mile Solutions. The outlet reports that it has put down a deposit of $5.5 million "to be applied toward the purchase." Assuming Mullen is not outbid, the eventual purchase will be for $55 million and will include ELMS' inventory and intellectual property rights as well as the company's Mishawaka, Indiana plant. But it will also include Mullen assuming $37 million worth of liabilities.

Mullen's Last Mile Solution?

It is encouraging to see Mullen making a play to expand its production capacity. But it doesn't change the fact that the acquisition of a troubled company like ELMS won't signal the type of turnaround that investors want to see. MULN stock has risen and fallen too many times for investors to have any real faith in the company.

Until Mullen starts putting actual EVs on the road, the stock won't attract any serious attention. And as InvestorPlace's Louis Navellier notes, even that may not be enough to demonstrate real growth. As he notes:

Even then, this may not be enough to get it moving again in the right direction. Further shareholder dilution appears very likely, given that mass production of vehicles is capital-intensive.

If you're bullish on the continued rise of EVs, there are better opportunities out there.

On the date of publication, Samuel O'Brient did not have (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.

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