We’re still seeing plays at all hours of the day (and there are still big spikers).
But thanks to this sobering drop…
Source: Stocks To Trade
SOBR 7-15-26, afternoon trading into after-hours, big dump.
I expect the runners might slow down for a couple of days.
Memorize this chart because it could potentially save you from falling into a trap like that.
Especially once you understand why it happened … and how easy it is for a stock to lose half its value in just over an hour.
Most Penny Stock Companies Are Terrible Businesses
Worse, most of these companies will fail (and most will do ANYTHING to survive).
SOBR Safe Inc. (SOBR) is just another in a long line of penny stock companies that screw over investors.
Always, always, always remember that these companies are the worst of the worst.
And while I LOVE to trade penny stocks because of their volatility…
This was a sobering reminder to lock in profits along the way and follow rule #1: cut losses quickly.
You might be wondering, if the company is so terrible…
Why Was SOBR Up So Much?
Going back, the company confirmed it was winding down revenue-generating operations.
It also confirmed that its pending merger with Clean World Ventures would go ahead as planned.
That got the attention of traders. As you can see from the chart, SOBR had some wild swings, including several volatility halts…
Source: Stocks To Trade
SOBR 7/10 after-hours to 7/15, 5-min candle, multiday runner, warrant exercise dump.
On Tuesday, July 14, SOBR was volatile in the morning but settled into sideways price action in the afternoon.
The biggest spike came in premarket trading on Wednesday.
Then, right after Wednesday’s close, the company exercised warrants for $3.1 million gross proceeds.
What Happens When Warrants Get Exercised?
When a company enters an agreement to exercise warrants, it is essentially getting the warrant holders to buy stock at a pre-agreed price.
But in this case, the company did two things that hurt investors (or longs who got greedy and overstayed)…
1. It lowered the exercise price from $1.30 to $1.05 per share (that’s a BIG discount).
2. It gave away two NEW warrants for each share sold.
The bottom line is, the company:
• Needed cash.
• Is trying to stay above the $1 per share Nasdaq listing requirement.
• Needs money for the merger.
This is nothing new for small, poorly run companies.
Sadly, anyone in SOBR got an almost instant reminder of the truth about penny stocks.
Always Be Alert, Ready & Cautious
Be alert and ready, but don’t force yourself to trade for the sake of trading.
We’ve seen incredible action this summer, but SOBR is a reminder that while volatile penny stocks are a great vehicle for trading…
They also come with a higher risk.
SOBR longs learned the hard way what happens when you get sloppy and overstay (even after the stock has failed to prove itself).
This is EXACTLY why I’m so cautious.
Penny stocks are awesome, right?
Just expect the worst and you’ll never be disappointed.
If you have any questions, email me at SykesDaily@BanyanHill.com.
Cheers,
Tim Sykes
Editor, Tim Sykes Daily
P.S. To celebrate my mom’s birthday, I took my parents to Colombia to open a new Karmagawa school.
Trading and teaching have been very good to me. And I love my life.
But seeing the joy on the faces of kids when we open a new school is one of the best feelings.
I hope you are inspired to give back when you gain your freedom.