We’re still seeing plays at all hours of the day (and there are still big spikers).
But thanks to this sobering drop…
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.
Table of Contents
Most Penny Stock Companies Are Terrible Businesses
Worse, most of these companies will fail (and most will do ANYTHING to survive).
If you ever wonder why I trade plays like $SOBR soooooo safely, it's exactly this, afterhours the scumbags just did a nasty toxic warrant exercise and while I wasn't sure earlier if I should lock in profits in the low $2s, I did and took a small safe gain that looks amazing now… pic.twitter.com/G8f8pZKRzo
— Timothy Sykes (@timothysykes) July 15, 2026
SOBR Safe, Inc. (NASDAQ: 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 to last week, 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 on Monday (July 13) including several volatility halts…
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)…
- It lowered the exercise price from $1.30 to $1.05 per share (that’s a BIG discount)
- 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.
Millionaire Moves
Get inspired by Eduardo’s journey to $3 million after starting with hardly anything.*
Eduardo has used trading to build a beautiful life for his entire family (and I couldn’t be any happier for him).
My biggest takeaway from my interview with Eduardo was that every time he focused on a monetary milestone, he screwed up.
In other words…
To achieve trading success Eduardo had to let go of the profit targets and focus on the PROCESS.
Eduardo (along with ALL my millionaire students) started with the Trading Challenge.
It’s the most comprehensive trading education I offer.
If you’re ready to commit, study, work hard, and learn from great mentors like Jack Kellogg and Ellis Hobbs…
If you’re ready for three webinars and multiple video lessons per week…
Apply for the Trading Challenge Today
Once you’re in, I’ll see you in chat…
On My Radar
My mom’s birthday was this week. To celebrate, I took my parents to Columbia to open a new Karmagawa school…
To celebrate my moms birthday I took my parents to #colombia to open a new @karmagawa school with @MCarolinaHoyosT @SolidaridadxCol and it’s especially cool since they missed their last school opening as they got sick traveling, but now they’re healthy and loving it!
Retweet if… pic.twitter.com/pwWJWupUaI
— Timothy Sykes (@timothysykes) July 16, 2026
Trading and teaching has 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.
Key Takeaway
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 volatility penny stocks are a great vehicle for trading…
They also come with 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.
Have a great day and a great weekend.
Cheers,
– Tim Sykes
*Results not typical. Past performance is not indicative of future results
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