On Monday, Mullen Automotive (NASDAQ:MULN) announced it had acquired assets from Romeo Power for $3.5 million.

From a fundamental standpoint, this means… well… not much. The $3.5 million purchase represents less than 2% of Mullen’s reported cash, and the assets appear to be a part of a fire sale that Mullen probably didn’t need.

Nevertheless, shares of Mullen surged 20% on the deal.

That’s because Mullen is a meme stock, a part of a magical world where stock prices often rely more on corporate cheerleading than on financial results. And in the pom-pom shaking department, few wave it as vigorously as David Michery, the maestro behind Mullen Automotive.

Now, before you raise an eyebrow, we need to give credit where it’s due. Michery’s history as a penny stock promoter is impressive. According to Hindenburg Research, Mr. Michery was the head of not one… but five penny stocks before Mullen. He’s also become a multi-millionaire in the process. His method? A blend of enthusiasm, artful tactics, and perhaps just a pinch of smoke and mirrors.

Although every quantitative model I’ve run shows MULN stock going to zero, don’t discount its CEO’s ability to trigger temporary squeezes in the meantime. David Michery, after all, wants you to buy more shares.

1. Insider Purchasing: “I Believe! No, Really!”

Insider purchasing is the corporate world’s equivalent of eating your own cooking. Corporate executives know far more about their company (or at least you hope they do), and if they’re buying up stock, you probably should too. Studies have shown that insider purchases historically outperform the market by 6%.

As for David Michery? He’s at the buffet, plate in hand. On Aug. 17, he scooped up 102,040 shares of Mullen Automotive for $0.9842 apiece.

This purchase sends a straightforward message to investors: “If I’m buying at this price, you probably should too.” The company also issued a press release for those who missed the SEC filing.

It’s not the first time a CEO has bought shares to shore up support. In 2016, JPMorgan (NYSE:JPM) CEO Jamie Dimon bought $25 million of corporate stock after shares fell on economic concerns. He would double his money in a year. More recently, regional banks from PacWest (NYSE:PACW) to U.S. Bancorp (NYSE:USB) used the same tactic during March’s crisis. (First Republic had a noticeable absence of insider purchasing).

Still, investors should tread carefully. Michery’s announcement came with an asterisk that his purchases could be matchable under SEC rules. That suggests he may have received more than the 102,040 shares, lowering his entry costs below market prices.

2. Share Buybacks: “Because Who Doesn’t Love a Good Sale?”

Since 2022, Mullen has raised $500 million at increasingly depressed valuations. Its financing rounds now cost common shareholders roughly $1.85 for every dollar raised. It’s a tactic I call “death spiral financing,” and it often ends in stocks heading to zero.

It turns out that the opposite is also true. Studies have found that companies repurchasing their shares tend to “show superior performance” over a three-year buy-and-hold period. For smaller and cheaper companies, these excess returns can exceed 20%. Even tech giant Nvidia (NASDAQ:NVDA), known for its AI chips and the source of our gaming happiness, has jumped on the buyback bandwagon. In its most recent quarter, the company announced it would spend $25 billion on buying back its shares.

David Michery might have finally read these reports. In July, Mullen announced it was changing course. Rather than sell shares to preferred stockholders, it would spend $25 million to repurchase them.

A bullish sign? Maybe. Mullen’s stock price closed 29% higher on the announcement date. It’s also a case of “sell low, buy back even lower,” thanks to Mullen’s sagging stock price.

Sensible? That’s harder to say. When you increase outstanding shares sixfold in a quarter, share repurchases become a game of paying shareholders back with their own money.

3. Staying in the Limelight: Mullen’s News Bonanza

P.T. Barnum once quipped, “There’s no such thing as bad publicity.” And that’s often true for carnivals and companies alike. Studies have shown that corporations can blunt negative news simply by writing lengthier press releases.

Mullen has taken this truth to an extreme. In the past 100 days, Mullen has dispatched 14 8-K filings to the SEC, a form designed to alert investors to material corporate events. (Even Tesla’s hype machine only issued three 8-K’s during that period). The EV startup also issued 35 press releases on its official website. That’s the equivalent of a company saying, “Hi there, remember us?” every other trading day.

Mullen even issued a press release on Sept. 1 to finish answering a question from Fox Business after losing its audio connection. It must be exhausting to keep up the work.

In fairness, the constant stream of upbeat news has kept investors hooked. According to Fintel.io, Mullen’s retail ownership this year has held steady even as shares have collapsed.

But there’s a caveat. Constant communication doesn’t guarantee financial success. And no matter how many press releases Mullen issues, the real test is whether they can convert the positive news into positive cash flows.

4. Window Dressing: Deck the Halls

For the uninitiated, “window dressing” might sound like preparing for an early Christmas. In finance, however, the term refers to a strategic maneuver to polish financial statements, especially at the end of a reporting period. Cash is raised… products are pushed to customers… and companies suck in their bellies to look picture-perfect for their quarter-end snapshot. Almost all industries are guilty of at least some quarter-end posing.

Mullen is no different. The company has recently targeted specific cutoff dates for Series D Preferred Stock and other derivatives to maximize its quarter-end cash balances. The company raised $100 million in the final days of its most recent quarter, bringing its total unrestricted cash balance to $214 million

The EV startup also uses several accounting tactics to maximize its balance sheet health. Much of its acquisitions are accounted under goodwill, which, unlike intellectual property, is not amortized. Executive compensation is mostly stock-based, reducing the apparent cash burn. (The company has given $71 million to executives in the past nine months).

Of course, window dressing is much like issuing too many press releases — it doesn’t change the underlying health of a firm. In fact, we know that companies that give too many disclosures often exhibit more earnings management and poorer performance. Buyer beware.

5. Playing to the Crowd

One final skill of David Michery is knowing how to engage his audience.

On Aug. 29, his firm announced it had filed a lawsuit against brokerage firms, including TD Ameritrade, Schwab and others, claiming “manipulation and unlawful stock trading practices.”

It’s like watching Rocky I for the tenth time. We already know who will win (and it’s not the main character). But we’re going to cheer on the underdog anyway.

Mullen follows a host of other meme stocks in targeting short sellers. In January, shares of Genius Group (NYSEMKT:GNS) spiked 120% after the unprofitable company announced it was starting a task force to investigate the practice. Michery has also learned the power of engaging on social media.

Of course, these efforts don’t always play out. Mullen’s case against the brokerage firms has already been demoted to a magistrate judge. And even AMC Entertainment’s (NYSE:AMC) “King of the Apes” CEO Adam Aron has needed to defend himself against shareholder vitriol. It’s not easy playing to the crowd, and few get it right forever.

What’s Mullen (Actually) Worth?

As told by David Michery, the story of Mullen is a thrilling ride that will someday create EVs to “fit perfectly into the American consumer’s life.” With a masterful blend of stock maneuvers, consistent news flow, strategic timing, and assertive legal stands, the company has created a buzz that money can’t buy.

Yet, beneath the fanfare, a fundamental question persists: What’s the future for a company that, so far, hasn’t produced a single internally developed vehicle? Established industry players already struggle with slim profits; Volvo-backed Polestar (NYSE:PSNY) only generates 4% gross margins despite selling $83,900 SUVs. And Rivian’s (NASDAQ:RIVN) $74,800 trucks are solidly unprofitable.

Mullen will find itself in an even more difficult position. Its $55,000 flagship SUV, the Mullen FIVE, targets a notoriously competitive and saturated segment of the American car market. And ramping up production will likely take more than the $214 million that Mullen has on hand. Rival Fisker (NYSE:FSR) consumed over $100 million in Q2 to produce just 1,022 SUVs.

For now, David Michery continues to play his cards with skill and flair. Short sellers bet against this stock at their own peril. But eventually, it won’t be enough for Mr. Michery to convince people to buy his stock. He’ll also need to build cars, and convince the world to buy them as well.

As of this writing, Tom Yeung 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.