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Camber Energy (CEI) Stock: Merger Closing Could Be Around the Corner

Joshua Rodriguez
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0
Camber Energy (CEI) Stock: Merger Closing Could Be Around the Corner

In February of 2021, Camber Energy Inc (NYSEAMERICAN: CEI) and Viking Energy Group Inc (OTCMKTS: VKIN) announced a coming merger. The merger was great news. Camber already owned the majority of Viking Energy and considering the synergies and growth of Viking, the merger was sure to bring CEI to the next level. It was great for Viking too. Through the merger, the OTC stock would find its way to a major exchange – opening the door to fundraising opportunities nonexistent on the OTC. Things were looking up. 

That is, until the United States Securities and Exchange Commission (SEC) had questions about Series C Preferred Shares. In a nutshell, these shares were somewhat toxic. They gave the holders the ability to dilute the stock heavily – something that’s never good news for shareholders. 

So, if Series C Preferred Shares set the stage for heavy dilution, why am I even talking about CEI? Well, the times are changing and the opportunity is quickly becoming one that I believe is hard to ignore. 

Toxicity Is Largely Alleviated & the Merger Is Likely Ahead

If there’s one thing I want to get across in this article, it’s simple:

The dark cloud that’s been hanging over the Camber Energy/Viking Energy merger for about a year and a half has dissipated, setting the stage for bright sunny skies ahead.

As mentioned above, the merger between Camber Energy and Viking Energy had been delayed as the result of shares that seemingly amounted to convertible debt with no floor. That’s painful, but that seems to be over. 

Well over 90% of the shares that halted the merger and threatened dilution have been taken off the books since the announcement of the acquisition. As a result, significant dilution seems to be a thing of the past for Camber and I’d be surprised if the merger didn’t go through in the next few months. 

What Does All This Mean for the Stock?

This is where things get very interesting in my humble opinion. Camber hasn’t had the best of times in the market through the delay of the merger and the dilution that followed in an effort to get out from under the toxic shares, for lack of a better way of saying it. YTD, the stock is down over 35% and over the past year, it’s given up more than 90% of its value. 

However, this has the potential to be a good thing.

Essentially, CEI’s merger delay and subsequent shedding of relatively toxic shares resulted in the stock’s value divebombing – creating a significant undervaluation. Over the past year and a half, a dark cloud hung over the stock, keeping CEI down and striking fear in investors – investors who continuously fled the ticker. 

Now, we have a situation where the company is nearly ready to close a transformative acquisition, but it’s still trading as if it never worked to get rid of those toxic shares. That creates an opportunity. 

The way I see it, when the public realizes the work CEI has done and the fact that the Viking merger is likely to close ahead, the stock is likely to push toward a more reasonable valuation – meaning significant growth could be ahead. 

Why This Merger Is Important

The merger between Camber and Viking brings significant value to Camber shareholders. That’s because much of the company’s value is already derived from its majority ownership in Viking. Combining the two companies only makes sense. But what exactly is Viking and where does that value come from?

Viking Energy has four divisions:

  1. Power Solutions & Clean Energy. Viking Energy’s majority-owned subsidiary, Simson-Maxwell, Ltd. is a leading manufacturer and supplier of power generation products, services, and custom energy solutions. The company has been operating for more than 80 years and currently services over 4,000 maintenance contracts. 
  2. Waste Treatment System Using Ozone. Viking also owns a cleaner, more sustainable way to get rid of waste for clients like laboratories, hospitals, and the military. 
  3. Open Conductor Detection Technology. Viking Protection Systems, LLC and Viking Sentinel Technology, LLC, two majority-owned subsidiaries of Viking Energy Group, own the intellectual property rights to fully developed, patent-pending, ready-for-market proprietary Electrical Transmission and Distribution Open Conductor Detection Systems. 
  4. Resources. Finally, Viking, through majority-owned subsidiaries, owns interests in oil and gas resources in the U.S..

The Bottom Line

The bottom line here is simple. Camber Energy has been battered in the market over the past year and a half or so. However, the dark clouds are becoming a thing of the past and it seems as though brighter skies are ahead as the heavy dilution weighing on the stock has largely been lifted the merger between Camber and Viking finally seems to be coming to a close. 

Article Resources

Disclosure: CNA Finance is not an investment advisor or broker-dealer. This article was written by Joshua Rodriguez and expresses his personal opinion of Camber Energy but should not be construed as a solicitation to buy, sell, or otherwise trade any specific security. This is a sponsored article and should not be considered investment advice. Investing comes with risk and CNA Finance strongly advises investors to seek advice from licensed professionals before making any investment decisions. 

SOBRsafe (SOBR) Stock: Breaking into the Telematics Industry

Joshua Rodriguez
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0
SOBRsafe (SOBR) Stock: Breaking into the Telematics Industry

I’ve been following SOBRsafe (NASDAQ: SOBR) for about a month now, and what a month it has been. In the most recent news, the alcohol detection company announced a new hire who will make it possible to hit the ground running in the telematics industry. 

What Is the Telematics Industry?

Telematics is all about the high-speed, long-distance transmission of data. This technology is how we monitor vehicles and equipment through onboard diagnostics and GPS technology. 

Think of telematics as the brain of a vehicle. A technology that reports everything from speed to tire pressure, when the vehicle is idling, fuel levels, and more. SOBRsafe has the potential to add another layer of data to this mix – alcohol detection data. 

Imagine a long-distance truck driver getting behind the wheel after lunch. But while at lunch, that driver consumed four alcoholic beverages. Currently, there’s no way for the owner of the company the driver works for to know that the driver is likely impaired. However, with SOBRsafe, that all changes. 

How Big Is the Telematics Industry?

The telematics industry is a massive one. In fact, in 2023, telematics companies are expected to produce a combined $8 billion in revenue. Moreover, the fleet telematics industry is expected to grow by 3.1% in 2023 alone. 

As an investor, I enjoy looking at industry sizes to determine what opportunities represent. Of course, I’m not under any misconception that SOBRsafe will earn 100% telematics market share, but it is nice to know that the company can generate millions of dollars in annual revenue by controlling a very small slice of this industry. 

How SOBRsafe Is Breaking into Telematics

In a press release issued Thursday of last week, SOBRsafe announced that it hired Chris Burton as its Director of Commercial Development. This hire is the catalyst for the company’s ability to break into telematics. 

That’s because Chris has worked in the industry for more than 15 years, with significant success to report. Over the years, he’s developed strong relationships with leaders in the industry. In fact, Chris currently has relationships with several original equipment manufacturers (OEMs). Those include Daimler, Freightliner, Continental, and Thomas Built Buses. As you can imagine, Chris will leverage his relationships in the industry to expand sales.

So, what does that mean for SOBRsafe? Just consider the fleet sizes of these companies. 

  • Daimler: Daimler currently operates more than 85,000 vehicles across 13 countries. 
  • Freightliner: Freightliner operates more than 175 locomotives across the United States. 
  • Continental Automotive: Continental Automotive is a fleet management company. 
  • Thomas Built Buses: Thomas Built Buses produces about 15,000 vehicles annually. 

Considering this information, the opportunity for SOBRsafe here is tremendous. Imagine every Daimler, Freightliner, and Continental vehicle being equipped with SOBRsafe technology. Think about the growth that could come if Thomas Built Buses were to incorporate SOBRsafe technology in the buses they produced moving forward. 

Relationships with these companies have the potential to send SOBRsafe revenues flying. 

The Bottom Line

The bottom line here is simple. SOBRsafe is executing tremendously and is likely to continue doing the same considering the fact that the company is bringing Chris on board. Breaking into telematics has the potential to produce significant revenues ahead. 

Article Resources

Disclosure: CNA Finance is not an investment advisor or broker-dealer. This article was written by Joshua Rodriguez and expresses his personal opinion of SOBRsafe but should not be construed as a solicitation to buy, sell, or otherwise trade any specific security. This is a sponsored article and should not be considered investment advice. Investing comes with risk and CNA Finance strongly advises investors to seek advice from licensed professionals before making any investment decisions. 

Short Squeeze: What Is It & How to Spot It

Joshua Rodriguez
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0
Short Squeeze: What Is It & How to Spot It

Short squeezes were made popular as meme stocks like AMC Entertainment Holdings (NYSE: AMC) and GameStop Corp. (NYSE: GME) made dramatic runs for the top in 2021. These are far from the first short squeezes in history and haven’t been the last either. 

Below, we’ll talk about what a short squeeze is, some of the biggest short squeezes that have taken place in history, and how to spot one of these events on the horizon. 

What Is a Short Squeeze?

A short squeeze is a market phenomenon that takes place when a heavily shorted stock moves up in value. Traders with short positions buy to cover, resulting in a tremendous run for the top. Here’s how it works:

  • The Short Sellers: Short sellers are traders who believe the stock is going to fall in value. To take advantage of this prediction, they borrow shares and sell them into the market immediately. When the stock falls, they repurchase the shares to return them, making the spread (difference between the selling price and buying price) as profit. 
  • The Stock: The target stock in a short squeeze is one that’s heavily shorted. That means more than 20% of the stock’s public float is sold short. 
  • The Big Move: The company announces positive news or traders believe the stock has reached the bottom, leading to an increase in value. Short sellers start to lose money as the stock goes up. 
  • The Short Seller Reaction: In an attempt to stop the bleeding, the short sellers purchases shares in the open market to close their positions. This leads to a high volume of buying – sending the stock screaming for the top. 

Short squeezes typically lead to gains of more than 20% but have been known to cause stocks to more than double.  

How Public Float Plays Into Short Squeezes

A stock’s public float is the number of shares that are in the hands of investors rather than officers, directors, and those with controlling interests. As mentioned above, stocks don’t have a heavy short interest until at least 20% of the public float is sold short. When good news happens, short sellers race to cover, causing a short squeeze. 

However, if you could find a stock that has a small public float and is primed for a short squeeze, you may be in for significant gains. 

That’s because the market is a system of supply and demand. As the law suggests, prices decline when supplies are higher than demand. On the other hand, when supplies are lower than demand, prices rise. Think of a stock’s public float as its supply count. 

During a short squeeze, demand for a stock climbs tremendously as short sellers race to cover their positions. If the target stock has a small float – less than 10 million shares available to the public – stringent supply could lead to the stock doubling in value or climbing even higher. 

Short Squeeze Examples

Two of the best-known examples of short squeezes are GameStop and AMC Entertainment. In early 2021, traders worked together in an attempt to push institutional short sellers out of multiple big names in the stock market. 

From January 8th, 2021 to January 29, 2021, GameStop shares climbed from under $5 per share to more than $81 per share. The movement was so dramatic that social media participants were creating memes about the event – leading to an entirely new category of stocks – meme stocks. 

AMC experienced a series of short squeezes from January 8th, 2021 to June 18, 2021. In that time period, the stock had climbed from $2.14 per share to a high of $59.26 per share. As mentioned above, these are some of the most popular examples of short squeezes, but they’re far from the only short squeezes in history. 

Short Squeezes Throughout History

  • Piggly Wiggly: One of the first big short squeezes in history happened in 1923, when traders started to short Piggly Wiggly. The company’s founder, Clearance Saunders, used his own money to purchase shares. He also worked with bankers to raise $10 million and purchase all but 1,128 shares of the company. The stock climbed by around 50%. Short sellers used the remaining public float to cover their positions and the NYSE permanently stopped all trading of the stock. 
  • Volkswagen: In October of 2008, Porsche announced that it owned a 74% stake in Volkswagen. At the time, short interest was relatively high on Volkswagen’s stock. On the day of the announcement, shares opened at €348 and closed at €517. The stock found its top at €999 per share the following day. 
  • Reliance Industries: 

Pros & Cons of Trading Short Squeezes

There are several pros and cons associated with trading short squeezes. Some of the most pressing are outlined below. 

Pros

The biggest pros associated with trading short squeezes include:

  • Massive Potential Earnings: Short squeezes are known for causing stocks to make a tremendous run for the top. All short squeezes result in short-term gains well over 10%, but many result in gains in the hundreds of percentage points – but keep in mind that these gains are typically short-lived. 
  • Excitement: Let’s face it. Most aspects of investing are relatively boring. However, when you see a stock flying like it’s got a pair of twin rocket boosters behind it, it’s a pretty exciting occurrence. So, trading short squeezes can be an exciting event. 
  • Easy to Spot: Finally, short squeezes are typically very easy to spot. Simply flind a few active stocks that are making tremendous runs, look for short interest, and strike on the stock that is indeed a short squeeze. 

Cons

Although there are plenty of reasons to start looking for short squeezes to trade, there are also some significant cons to consider before you start. Some of the most pressing include:

  • Impossible to Time: Short squeezes cause stocks to rise to ridiculous levels. However, it’s almost impossible to time when these stocks are likely to fall back down. As a result, many less-than-experienced investors take significant hits as the short squeeze ends. 
  • Risk: Because it’s impossible to time the reversal here, short squeezes are some of the riskiest events to trade. So, if you’re risk averse, this isn’t an option for you. 
  • Short-Lived: Short squeezes are typically a short-term event. So, you’re not going to make any serious long-term gains trading these events. In fact, if you jump in on a short squeeze and hold the stock for the long term, chances are you’ll lose and it will take a significant amount of time to recover. 

How to Spot a Short Squeeze

Spotting a short squeeze is relatively simple. Here’s how it’s done:

  1. Find Active Stocks: Use your favorite stock screener to find the most active stocks on the market. You can use Stock Twits or a number of other resources for this. While you look for stocks, specifically look for those that are experiencing more than 10% gains.  
  2. Look Into Short Interest: In order for a short squeeze to occur, there must be heavy short interest on the stock. So, look into short interest and ensure that it’s over 20%. If it is, there’s a good chance that the significant upward movement is likely the result of a short squeeze. 
  3. Trade the Squeeze: You’ve found a short squeeze. Now, it’s time to use your chart and the technical data within it to trade the squeeze. 

How to Predict a Short Squeeze

Predicting a short squeeze is slightly more difficult than finding one that’s already active, but it’s not impossible. Here are the steps:

  1. Find Heavily Shorted Stocks: Use a stock screener to find stocks with short interest that’s over 20%. After all, you need heavy short interest in order for a short squeeze to take place. 
  2. Look for Coming News: In most cases, a positive catalyst (positive news) starts the upward movement in short squeeze stocks. So, consider what news may be on the horizon. For example, did you find a biotechnology company with heavy short interest? Do they have a PDUFA date on the horizon?
  3. Assess the Possibilities: Now, it’s time to consider what the probability of positive news might be. For example, if the biotech company with the PDUFA date on the horizon recently had a meeting with the FDA that went well, there’s a highly likelihood their drug will be approved. That’s good news for a potential short squeeze. 
  4. Wait: Never start trading a short squeeze before it happens. Instead, wait to confirm your findings. Once the squeeze starts, you should have plenty of time to capitalize on the trade. 

Final Thoughts

Short squeezes are an interesting phenomenon in the stock market. Not only are they exciting to trade, they have the potential to yield significant returns. On the other hand, they typically come with high risk. So, only trade these events if you have a detailed understanding of technical analysis and how to trade fast-paced moves in the stock market. 

Article Resources

SOBRsafe (SOBR) Stock: 2022 Was Impressive | 2023 May Be More So

Joshua Rodriguez
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SOBRsafe (SOBR) Stock: 2022 Was Impressive | 2023 May Be More So

I introduced SOBRsafe™ (NASDAQ: SOBR) to the CNA Finance community recently because I was interested in the company’s technology and how it may save the US economy billions of dollars each year in spending on alcohol-related accidents. 

As I continue to dig deeper into the company, I’m becoming more and more impressed with the opportunity it represents. Much of this excitement hit when I came across the company’s 2022 recap. 

SOBRsafe Is Delivering in a Big Way 

There’s no question that SOBRsafe made significant progress from a financial and operational standpoint in 2022. Find a breakdown of both below.

SOBRsafe Financial Progress

Since its uplist to the NASDAQ in June 2022, SOBRsafe has raised $19.5 million resulting in total paid-in capital since 2019 of $25 million. As a result of the company’s fundraising efforts, it has enough money on hand to execute on its goals through 2023 and moving into 2024. 

SOBRsafe Operational Progress

The company is also impressive from an operational standpoint. Since it was listed on the NASDAQ, the company has entered the early stages of revenue generation, building a book of six paying clients and entering into agreements with 9 distributors. As a result of these agreements, the company now has access to well over 50,000 potential customers. 

SOBRsafe also took part in 10 alcohol and drug detection-related conferences, conducted thousands of product demonstrations, and collected more than 600 leads. 

However, what I find most interesting is that the company doubled its sales staff. That’s exciting news as SOBRsafe actively works to turn the leads it has generated over the year into sales. 

What Is SOBRsafe?

SOBRsafe is a technology company that has developed two devices in the alcohol detection space:

  • Stationary Device: The first device is a small one that looks like a computer mouse with two sensors. One is a biometric reader to verify identity, while the other analyzes the vapor emitted from the user’s finger to determine the absence or presence of alcohol. 
  • Wearable Device: The company has also developed a wearable device that looks somewhat like a fitness band. When someone wears the device on their wrist, it employs the same alcohol detection technology, but with continuous monitoring and both GPS tracking and band removal alerts. 

For more information on SOBRsafe, check out the first SOBR article I posted. 

Why This Technology Is Important

I touched on the fact that SOBRsafe got my attention because it was solving a problem that costs the United States economy billions of dollars per year. However, it’s hard to see just how important this technology is without diving into the numbers. 

Alcohol abuse results in $70 billion in costs to the United States economy between crashes, increased healthcare costs, and justice department needs each year. That’s staggering enough but it’s not the end of the story. Alcohol abuse also leads to $179 billion in workplace productivity losses each year. 

All told, the United States Centers for Disease Control (CDC) suggests that excessive alcohol use costs the United States economy $249 billion annually – that’s just shy of a quarter trillion dollars! 

Of course, no single solution is going to cut that cost completely, but SOBRsafe has the potential to make a significant dent in it. Companies who take advantage of the technology to ensure their employees aren’t under the influence while on the job won’t experience the extreme losses other companies might. 

Moreover, the technology has already been proven to reduce insurance rates, which in many cases means it pays for itself. 

Building Residual Revenue

SOBRsafe’s revenue model is hard to ignore. The company has built a system that allows it to generate revenue from the sale of its technology, but its primary focus is a SaaS subscription service that’s likely to generate substantial residual revenue ahead. Here’s how their revenue model works:

  • Device Revenue: Companies pay $600 for each stationary device they purchase and $450 for each wearable device they purchase. 
  • Residual Revenue: Once they’ve purchased the devices, companies also pay $30 per user per month. This fee connects the device to the Internet of Things making it possible for employers to track data and act on-demand when the technology detects the presence of alcohol. 

The Bottom Line

The bottom line here is simple SOBRsafe is the first to market with a touch-based alcohol detection system. The company’s technology has the potential to put a significant dent in the massive $249 billion economic loss excessive alcohol use represents. 

But having the technology is only half of the story. After all, it doesn’t matter how great a company’s product is if it’s not executing for its investors. 

That’s where SOBRsafe really shines. The company had several WOW moments in 2022 and is likely to have several more as 2023 progresses.  

Article Resources

Disclosure: CNA Finance is not an investment advisor or broker-dealer. This article was written by Joshua Rodriguez and expresses his personal opinion of SOBRsafe but should not be construed as a solicitation to buy, sell, or otherwise trade any specific security. This is a sponsored article and should not be considered investment advice. Investing comes with risk and CNA Finance strongly advises investors to seek advice from licensed professionals before making any investment decisions. 

True Velocity (TV Ammo) To Merge With Breeze Holdings (BREZ) Stock in Meaningful SPAC Deal Shortly

Joshua Rodriguez
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0
True Velocity (TV Ammo) To Merge With Breeze Holdings (BREZ) Stock in Meaningful SPAC Deal Shortly

Late last year, Breeze Holdings Acquisition Corp (NASDAQ: BREZ) announced that it would merge with TV Ammo (True Velocity) in a SPAC deal valued at $1.21 billion. Below, we’ll talk about the deal, what TV Ammo is, and why investors should be paying close attention as this deal comes to a close. 

The SPAC Deal Between TV Ammo and BREZ

As mentioned above, the deal was announced late last year. Under the deal, Breeze Holdings will merge with True Velocity Ammo in a deal valued at $1.21 billion. On top of that $1.21 billion valuation, the deal also includes up to $100 million in private placement financing. 

In the October announcement, the two companies said that the agreement was a definitive one and that the deal is expected to close in the first quarter of 2023. Considering that statement, the deal could close any time now since we’re squarely in the first quarter of the year. 

Following the merger, True Velocity Ammo will be the surviving company and Breeze Holdings will cease to exist. 

What Is a SPAC Deal

A Special Purpose Acquisition Company raises money through a public market IPO with one intention. That intention is to use the money it raises to acquire another company, essentially bringing that company public. 

That’s exactly the type of deal we’re seeing with Breeze Holdings and TV Ammo. 

Breeze Holdings began trading on November 23, 2020, in an attempt to raise funds to acquire another company. Today, the company has the funds it needs for the acquisition, targeted TV Ammo as the company it intends to acquire, and completed a definitive merger agreement that will result in the acquisition. 

What Is True Velocity Ammo

True Velocity Ammo is a company that has the potential to become a disruptive force in the ammunition industry. That’s because there’s a big problem in the industry. 

The vast majority of ammunition is created using brass cartridges that are packed with primers, gunpowder, and bullets. That system has worked for ages – but now it’s coming under pressure. You see, brass is a relatively expensive metal, and occasional shortages mixed with increasing gun ownership in the United States mean that many are having difficulty finding the ammunition they need to operate their firearms. 

That’s where TV Ammo comes in. 

The company developed proprietary technology that allows it to nix the brass cartridges needed for the development of ammunition. Not only does this ammunition give you the ability to hunt in any environment, but it also comes with a few other perks:

  • Lighter Load: True Velocity ammunition is about 30% lighter than traditional ammunition with brass cartridges. 
  • Improved Accuracy: The company explains on its website that it uses various proprietary technologies in the production of its ammunition. As a result, its ammunition is more accurate than traditional options. 
  • Reduced Heat Transfer: Many gun enthusiasts have felt the uncomfortable feeling of a hot barrel pressed up against an arm, leg, or another part of their body after target practice. TV Ammo helps to alleviate this issue too because the plastic cartridge leads to reduced heat transfer. 

Moreover, TV Ammo plans on producing several calibers, including .50, .338, 7.62, .308, 6.8, 6.5, and 5.56. 

A Huge Deal

Along with the announcement of the SPAC deal, True Velocity announced that it entered into a landmark partnership with Bass Pro Shops and Cabela’s. These partnerships are centered around a three-to-five-year agreement. 

As part of the agreement, Bass Pro Shops and Cabela’s will carry True Velocity ammunition across all of its retail channels. Moreover, this ammunition won’t just be in Bass Pro Shops and Cabela’s stores, customers will have the ability to sign up for a subscription service to have their ammunition regularly shipped to their front doors. 

A Massive Market Opportunity

True Velocity Ammo is still a relatively small fish in a vast ocean, but that presents an opportunity. I’m sure you’ve watched Shark Tank in the past. The show gives entrepreneurs the opportunity to pitch their ideas in front of venture capitalist Sharks. If the Sharks believe the product could be disruptive, they invest at a significant discount to what the company might be worth in the future if all goes well. 

TV Ammo is a Shark Tank-like opportunity. 

The company recently signed its landmark deals with Bass Pro Shops and Cabellas, leading to a national rollout of its product in big-box stores. Moreover, the company is likely to continue expanding its footprint across the United States and around the world thanks to proprietary technologies that make ammunition lighter, more accurate, and less conductive to heat transfer. 

So, how big is the market opportunity?

According to Verified Market Research, the ammunition market was worth about $22.35 billion in 2021. The industry is expected to grow at a compound annual growth rate (CAGR) of 5.42%. As a result, experts expect the ammunition market to be worth $35.94 billion by 2030. 

That’s a massive market, and when companies disrupt massive markets like this, the potential for growth is impossible to ignore. 

When Will the Deal Go Down

There are no public clues as to exactly what date the deal between Breeze Holdings and TV Ammo will take place. All we know is that the deal is expected to take place sometime in the first quarter of 2023. That’s good news considering it’s already January 25th. 

That means according to the time frame announced with the news, the deal is expected to close within the next two or so months – though, I expect that it may close sooner than that. 

The Bottom line

The bottom line here is simple. TV Ammo has the potential to disrupt the ammunition industry as we know it. With products already in Bass Pro Shops and Cabella’s stores, the company may be on the fast track to doing just that. 

If it’s capable of doing so, True Velocity will take its share of an industry that’s expected to be worth nearly $36 billion annually by 2030 – and continue to grow. 

Of course, investing in SPACs can be risky. It’s important to do your own research and form your own opinions. Nonetheless, BREZ is a stock to pay close attention to with the TV Ammo merger just around the corner. 

Article Resources

Disclosure – CNA Finance is not an investment advisor or broker-dealer. The author of the article holds no shares in any stock mentioned herein and has no intentions to open positions within the next 72 hours. CNA Finance doesn’t have a monetary relationship with any stock mentioned herein. This article represents the views of the author, but not necessarily the views of CNA Finance or its team. Investing and trading come with risk. Carefully consider these risks and consider speaking with a licensed professional before making investment decisions. This article is not intended to constitute financial advise and is not a solicitation to buy or sell equities. 

SOBRsafe (SOBR) Stock: A Potential Multi-Billion Dollar Opportunity

Joshua Rodriguez
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0
SOBRsafe (SOBR) Stock: A Potential Multi-Billion Dollar Opportunity

Shark Tank is one of the most popular television shows on air today. Millions of people tune in to the show every time a new episode airs. There are a couple of reasons the show is so appealing:

  • Innovation: People are naturally drawn to new, exciting products. 
  • Solutions: Shark Tank entrepreneurs often produce solutions like nothing ever seen before. 
  • Success: It’s also enjoyable to watch as the shark investors help entrepreneurs make their dreams come true. 

If you’re like me, you’ve often dreamt about what it would be like to become a shark. You’d love to get involved in an innovative product in the early stages that has the potential to change the status quo. I may have found such an opportunity in a stock known as SOBRsafe™ (NASDAQ: SOBR). 

What Is SOBRsafe?

SOBRsafe is a publicly traded company that’s dedicated to promoting safety in the workplace by addressing a major problem – alcohol use. This is a crtitical issue that costs American employers and insurers tens of billions of dollars per year. 

How does SOBRsafe address the workplace alcohol use problem?

The company developed a proprietary solution known as SOBRcheck™ that looks similar to a computer mouse. When employees get to work, they place their index and middle fingers over the sensors in the device. One sensor performs a biometric scan to confirm the identity of the employee while the other tests the vapor emitted from the employee’s skin for alcohol. 

If the employee has been drinking, the device relays the information to the proper parties via a powerful software back end so the issue can be addressed according to corporate policy.  

Why This Technology Is Important

SOBRsafe’s technology can save lives and money. Currently, more than 95,000 people die each year in the United States due to excessive alcohol use. Moreover, American employers and insurers spend $63 billion per year on alcohol-related injuries, deaths, and productivity losses. Check out the stats below to see how important SOBRsafe’s technology really is. 

Workplace Stats

Alcohol has proven to be a substantial issue in the workplace. Here are some workplace alcohol use stats that you may find shocking:

  • 47% (nearly half) of workplace injuries are linked to alcohol use. 
  • Workers with an alcohol problem are 270% more likely to be involved in a workplace accident. 
  • At least 11% of workplace fatality victims test positive for alcohol. 

Insurance Stats

SOBRsafe is also an important product from an insurance standpoint. In fact, companies that employ the device may receive discounted premiums. Here’s why:

  • Between 38% and 50% of workers’ compensation claims are the direct result of substance abuse. 
  • Substance abusers use employee health benefits three times more than other employees. 
  • Substance abusers experience three times the medical costs of average consumers. 
  • SOBRsafe customers have experienced up to a 20% insurance savings upon SOBRcheck installation. 

Areas Where SOBRsafe Can Make a Significant Impact

In my opinion, SOBRsafe’s technology can create a meaningful impact in just about any workplace. However, there are some industries where the company’s technology represents the most meaningful opportunities. 

Justice

There are several applications for the SOBRcheck, and the company is already taking advantage of one of them. People on probation for alcohol-related crimes are often required to take a breathalyzer test when they meet their probation officers. This can lead to problems like:

  • Breathalyzers aren’t always convenient. 
  • Burping, hiccupping, or vomiting before the test can lead to high readings even if the person didn’t drink any alcohol. 
  • Certain diets can lead to false-positive breathalyzer readings. 
  • High breath temperatures can increase alcohol readings by 10% to 20%. 

Some justice departments around the country are already combatting these issues by implementing SOBRcheck in their probation offices. As the technology proves effective, this trend is likely to grow. 

School Bus Drivers

118 school bus drivers have been arrested for DUIs since 2015 – and that’s only the ones the police caught, likely the tip of the iceberg. Unfortunately, more than one-third of those violations led to accidents, many of which resulted in the hospitalization of student passengers. 

Beyond the 118 school bus drivers that were caught driving impaired, 260 drivers either failed or refused post-route alcohol tests. Perhaps even more concerning is the fact that there’s little-to-no clarity in terms of keeping a record of the severity of issues or even impaired driver identification. 

SOBRsafe solves both of these problems. With SOBRcheck, school districts can ensure that their drivers haven’t consumed any alcohol. When the device does detect alcohol use, it’s connected to the internet of things (IoT), making good record-keeping an automatic process. 

Construction

Alcohol wreaks havoc on the construction industry as well. In fact, more than 20% of construction accidents are directly related to alcohol consumption. Not to mention, about 12% of construction workers have an alcohol use disorder, significantly higher than the 7.5% national average. 

Construction companies that use SOBRcheck can reduce the risk of their workers being involved in such accidents. Moreover, the introduction of the technology into their businesses will likely result in insurance savings that offset the cost of the introduction. 

Fleet Management

Managing a fleet can be concerning, especially when 56,000 commercial drivers were charged with substance abuse violations in 2020 alone. Not to mention, there were 24,000 alcohol-related fatalities involving heavy and light-heavy trucks in the same year. 

Companies that manage a fleet of vehicles and drivers can benefit greatly by incorporating SOBRcheck into their day-to-day activities. 

Logistics & Warehousing

10% of logistics and warehouse workers are heavy drinkers. At the same time, there are around 856,000 forklift operators across the country with about 11% of them involved in an accident each year. 

SOBRcheck can help reduce the occurrence of forklift accidents across the United States, not only saving companies money but saving lives in the process. 

Managed Care

The rehabilitation sector was worth nearly a quarter trillion dollars last year and is expected to continue growing at a massive rate. Although companies in this sector treat patients for alcohol use disorders, they lack non-invasive, yet accurate tools for assessing alcohol use in their patients. 

Their forthcoming wearable band SOBRsure™ has already been embraced within the rehab industry, garnering a purchase order for 1,150 bands while still in pre-sale mode. 

The Market Opportunity Is Tremendous

When I look for an investment opportunity, I like to look for opportunities that hit three nails on the head:

  1. They address a massive market. 
  2. They solve a problem that desperately needs a solution. 
  3. They have little-to-no competition. 

SOBRsafe seems to hit all of these. 

There’s a meaningful place for SOBRcheck in just about any industry and there’s no question that the product solves a problem that desperately needs a solution. After all, it has the potential to save lives, keep children safe on their commute to and from school, and save corporations significant amounts of money in insurance premiums. 

Not to mention, the product addresses multiple industries, some worth hundreds of billions of dollars per year. Sure, there’s competition from the status quo, the breathalyzer, but that’s like comparing apples to oranges. Breathalyzers are known for inaccuracy and are far from convenient. SOBRcheck technology from SOBRsafe has the potential to turn the alcohol detection industry upside down with no apples-to-apples competitors in sight. 

Is Dilution Ahead?

Any time I invest in a small company, I like to make sure they’re well capitalized. After all, if they need to raise money in the near term, dilution slashes the value of my investment. The good news is that when it comes to SOBRsafe, there’s no need for dilution any time soon. 

In fact, in late October 2022, SOBRsafe announced that its cash reserves exceeded $10 million as a result of $6 million in financing and $3 million in warrant exercises on top of the cash the company already had on hand. That’s enough money for the company to execute its business model at least through the end of 2023. In fact, Dave Gandini, CEO at SOBRsafe, had the following to say about the company’s financial position:

“We are pleased that our institutional investors continue to demonstrate confidence in and support for our technology, business plan and customer adoption. This cash on hand empowers us to accelerate the building of our national sales team and gives us the opportunity to ‘pull forward’ value-added features that drive increased margin and key differentiation in the detection market. Finally, we believe we have the cash to fully implement and execute on our business plan in 2023 and beyond.”

2023 is Poised to Be a Big Year for SOBRsafe

SOBRsafe is already generating revenue, but like any other company, it plans to generate much more. In the year ahead, the company is working on minting relationships that expose its products to a wider audience while building a sales team to do more of the same. 

At the same time, the company’s products are already being used in the justice and managed care industries. As they prove effective, they’re likely to expand further within these sectors. All told, 2023 is likely to be an exciting year for SOBRsafe. 

The Bottom Line

The bottom line here is that SOBRsafe is a compelling investment opportunity. The company has the potential to play a substantial role in solving the alcohol-related workplace accident problem across the United States while creating better outcomes in the rehabilitation and probation categories. 

Although there are always risks to consider when you invest, especially in early-stage companies like SOBRsafe, this stock and the potential it brings to an investment portfolio are hard to ignore.  

Article Resources

Disclosure: CNA Finance is not an investment advisor or broker-dealer. This article was written by Joshua Rodriguez and expresses his personal opinion of SOBRsafe but should not be construed as a solicitation to buy, sell, or otherwise trade any specific security. This is a sponsored article and should not be considered investment advice. Investing comes with risk and CNA Finance strongly advises investors to seek advice from licensed professionals before making any investment decisions. 

Atlis Motor Vehicles (AMV) Stock: More Than Doubles on Energy Solution Demand

Joshua Rodriguez
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0
Atlis Motor Vehicles (AMV) Stock: More Than Doubles on Energy Solution Demand

Atlis Motor Vehicles Inc (NASDAQ: AMV) shocked investors mid-day Wednesday, January 11, with shares more than doubling mid-day. The stock popped as the result of non-binding letters of intent (LOI), Memoranda of Understanding (MOI), and purchase orders that suggests demand for the company’s batteries is flying. 

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Details on the News That Sent AMV Shares for the Top

As mentioned above, Atlis Motor Vehicles is flying in the market today. At the time of writing this article, the stock was trading on gains of over 150%. The gains come after the company announced that it reached a key milestone surrounding non-binding letters of intent to purchase batteries. 

According to the company, it has received multiple non-binding LOIs, MOUs, and purchase orders. These signs of demand came from several customers in the automotive, heavy equipment, and solar industries. All told, there’s demand for two gigawatt hours of battery capacity from the company. 

A Low Float Played a Role

The fact that demand for Atlis Motor Vehicles’ battery packs is up isn’t the only reason the stock experienced such significant gains. A low float played a meaningful role in the rocket-like movement seen on the chart. 

At the moment, there are under 9 million shares in the AMV public float. Since the law of supply and demand ultimately dictates stock prices, the limited supply helped AMV shares reach the incredible mid-day highs we’re seeing at the moment. 

When the news hit the tape, countless investors decided it was time to dive in. However, with a very limited number of available shares out there, the price rose significantly as more and more volume started to roll in. So far, more than 25 million shares have traded hands today – that’s nearly three times the total number of shares in the stock’s entire public float. 

What Is Atlis Motor Vehicles?

Atlis Motor Vehicles is an electric vehicle company. In particular, the company’s star product is the Atlis XT truck. The Atlis XT is an all-electric truck that comes with some significant perks. It can charge in 15 minutes, has a 500-mile range, and has a 35,000-pound towing capacity. 

However, the Atlis XT truck isn’t the only thing the company has to offer. 

Another core offering of the company is the Atlas XP platform. The platform is essentially the frame and electrical components of a work truck. From there, enterprise customers are able to create their own unique truck designs to meet the specific demands of their industry. 

However, the big story from Atlis Motor Vehicles today surrounds the company’s energy solutions. In my humble opinion, this is the are that makes Atlis shine the most. At the moment, if you want to charge an electric vehicle to 100% capacity, you’ll have to wait at least a couple of hours – in some cases, it could take nearly a day. 

With Atlis Motor Vehicles’ energy solutions, that’s not the case. The company is currently developing solutions that make it possible to charge electric vehicles in around 15 minutes. Sure, that’s still longer than it takes to fill a vehicle with gas, but it’s miles ahead of anything available today. 

No wonder there’s so much demand for the company’s energy solutions. 

Should You Dive Into Atlis Motor Vehicles?

This is a difficult question to answer, and one that I simply couldn’t answer for you. However, I can share the pros and cons with you and let you make your own decision. Here are the pros and cons to consider:

AMV Stock Pros

  • Atlis Motor Vehicles’ energy solutions could change the way we see electric vehicles. One of the biggest barriers to the EV industry is charging times. If the company is able to get vehicle charging times to 15 minutes or less, the move would represent a significant step forward for the electric vehicle industry. 
  • There’s obviously significant demand for the company’s energy solutions. This could push the company to profit quickly once it leaves the development stage and moves into the commercialization stage. 
  • There’s plenty of interest from investors as well. Although the stock isn’t likely to stay at such extreme high levels in the short term, high levels of investor interest could put a floor on the stock. 

AMV Cons

  • Atlis Motor Vehicles is in the development stages. Sure, the company has solid proof of concept, but it hasn’t yet achieved something it can bring to the mass market. Any company in the development stage is a risky play. 
  • The company is losing money hand over fist as it continues to develop its product. As such, it will likely be heavily reliant on funds from the market and its supporters for some time ahead. This could result in the dilution of early investor value. 
  • Purchase orders, non-binding letters of intent, and MOUs are great, but they’re very different from cold-hard cash. There’s no telling what percentage of these will become converted sales once the company is able to fulfill. 

The Bottom Line

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The bottom line here is simple: there are good reasons for the tremendous run for the top AMV stock is taking in the market today. On the other hand, there are significant risks to consider before you get involved. 

Sure, Atlis Motor Vehicles may change the shape of the electric vehicles industry with record-setting charging times. Then again, the entire company could go down in bankruptcy before it ever makes its way through development. It’s easy to look at the extremes and become excited or fearful. 

Instead, you should take a calculated approach to investing. Consider whether or not you think AMV will achieve its goals and how much of a difference its technology will make in the electric vehicles and clean energy space. Also, consider the risks and what percentage of your portfolio you’re willing to risk on AMV stock. 

If you’re left with more questions than answers, there’s no harm in talking with your financial advisor about a potential investment. 

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Biora Therapeutics (BIOR) Stock: What’s In Store Next?

Joshua Rodriguez
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0
Biora Therapeutics (BIOR) Stock: What’s In Store Next?

Biora Therapeutics Inc (NASDAQ: BIOR) had an incredibly strong day on Tuesday, January 10th, after the company announced it received pre-IND feedback from the United States Food and Drug Administration (FDA). When I say an incredibly strong day, the stock climbed 155.92% by the close of the trading session. 

When big runs like these happen, it’s hard not to want to get involved. After all, who doesn’t want to earn more than 150% returns in a single trading session? Below, we’ll look into why the stock climbed so much on Tuesday, what Biora Therapeutics does, and whether or not it’s a strong stock to consider investing in moving forward. 

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The News That Sent BIOR Stock on a Frenzy

As mentioned above, Biora Therapeutics stock flew for the top today, closing more than 155% more expensive today than yesterday. The news that sent the stock for the top surrounded feedback from the United States Food and Drug Administration (FDA) about the company’s PGN-600 development plans. 

The PGN-600 program is designed to target the treatment of ulcerative colitis (UC). 

Based on the feedback the company received surrounding its clinical development plans, it announced that it remains on track to file its IND (investigational new drug application) and launch a clinical trial relatively soon. 

What Is Biora Therapeutics?

Biora Therapeutics is exactly what most people think of when they think about biotechnology companies. The company is using state-of-the-art technology in an attempt to produce better clinical outcomes. 

In particular, the company is literally encapsulating technology that solves one of the biggest problems in medical science today – drug delivery. In particular, the company is working to find solutions for delivering drugs directly to the site of gastrointestinal diseases. 

The technology at the center of everything the company does is a capsule that is capable of holding a drug intact until it reaches the site of disease. Once the capsule reaches the disease site, it releases the drug to the disease site without the need for an injection. 

Understanding Biora Therapeutics From a Development Stage Perspective

In order for Biora Therapeutics to sell its innovative technology, the company must successfully make it through multiple clinical studies. At the moment, the company is in the early clinical stages – producing a proof of concept for regulatory agencies. 

The company’s pipeline includes three clinical programs:

  • DDS: The DDS clinical program is centered around the company’s ingestible drug delivery technology. This program is currently in early clinical stages. 
  • PNG-600: The PNG 600 clinical program is a combination program that combines the company’s proprietary drug delivery device with tofacitinib (Xeljans), a Pfizer product that is approved for the treatment of arthritis, psoriatic arthritis, and ulcerative colitis. The target indication in this particular program is ulcerative colitis – a condition with a more than $5.5 billion annual market. This program is currently in preclinical stages. Following today’s news, the clinical stage may be just around the corner. 
  • PNG-001: PNG 001 is another combination development program. This one is focused on the combination of the company’s proprietary device and an adalimumab variant. Adalimumab is currently sold as Humira as well as other name brands. It’s a monoclonal antibody that’s been FDA-approved to treat ulcerative colitis as well as eight other conditions associated with arthritis, spondylitis, Crohn’s disease, and psoriasis. 

So far, all programs the company is working on are promising. The company’s drug delivery device is proving its concept and the two programs having to do with actually treating ailments involve therapeutics that already have a proven track record of safety, tolerability, and efficacy. 

On the other hand, it’s important to keep in mind that anything can happen in clinical trials. Investing in early-stage clinical programs is risky business. As such, if you do decide to buy shares of BIOR, it’s important to consider the risk and minimize your long-term exposure to the stock. 

The Best Case Scenario for Long-Term Investors

In a best-case scenario situation, BIOR investors have a long road ahead, but that road can be incredibly fruitful. It will likely take at least a few years, if not several years, for the company to produce a product that reaches the market. Keep in mind, PNG-600 is the first program targeting a mass-market indication and that program hasn’t started yet. 

In most cases, it takes at least three clinical trials for a new treatment option to go from the clinical-stage to regulatory approval. These trials cost millions of dollars to work through and dilution as a result of a need to raise cash is commonplace. 

However, if you’re willing to stick it out, and Biora Therapeutics is successful in bringing one of its programs to market, you could be in for a massive payday. As this new option gets closer to approval, there’s a strong likelihood that massive companies like Xeljans and Abbvie will find value in the company’s technology and seek to acquire it before it hits the market. 

Even if an acquisition doesn’t take place, a new, less invasive, more accurate option for delivering therapeutics to ulcerative colitis patients has the potential to take a meaningful share of the $5.5 billion ulcerative colitis market.

The Risks 

There’s no such thing as a risk-free investment. Moreover, investments in clinical-stage biotechnology companies come with significant risks. Some of the biggest risks Biora Therapeutics faces include:

  • Clinical Risk: There’s a risk that one of the company’s clinical trials fails. If that’s the case, it could send the stock tumbling. 
  • Regulatory Risk: Even if everything goes well across all clinical trials, Biora Therapeutics isn’t in the clear yet. The company must properly convey the data from the trials to the FDA and it’s ultimately the FDA’s decision to approve or reject applications to bring new drugs and medical devices to market. 
  • Market Risk: There have been several cases where a company comes up with a meaningful solution to a medical problem, only to find difficulty selling it. Even if the company makes it through regulatory approval, it could still flop in the market. 
  • Financial Risk: All of the steps above take millions of dollars to accomplish. As a clinical-stage company, Biora Therapeutics isn’t producing a single dime from sales. As such, it will need to raise funds consistently throughout the development process. This could lead to heavy dilution of early investor value. 

Should You Invest in BIOR Stock?

That’s the million-dollar question and to be quite frank, one I can’t answer for you. The truth is that BIOR comes with some significant risks, but the long-term reward is hard to ignore. With that said, it’s important for you (and potentially your financial advisor) to weigh the risks of the investment and consider how it fits into your portfolio as a whole before you decide to – or not to invest. 

Where Is BIOR Stock Headed Next?

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There’s no telling where BIOR stock is headed next. However, if premarket movement is any indication, Wednesday, January 11th is likely to be a strong day for the stock. The stock is already up nearly 30% and it’s only about 5:20 in the morning.

However, be aware that the market tends to move in a series of overreactions. So, while the stock is climbing at the moment, it’s may take a deep dive after such tremendous growth yesterday and in the premarket this morning.  

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G Medical Innovations (GMVD) Stock: Should You Join the Frenzy?

Joshua Rodriguez
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0
G Medical Innovations (GMVD) Stock: Should You Join the Frenzy?

G Medical Innovations Holding Ltd (NASDAQ: GMVD) is trading on extremely high volume and posting significant gains. This is all part of a wild ride that started on January 5th, when the company announced it had been granted two new United States patents. 

Sure, with the great news out there, you may think it’s time to dive in – but as with all investments, it’s important to do your research first. Read on below for a glimpse into what’s going on with GMVD stock, what G Medical Innovations does, and whether or not the stock is worth a second look for investors or traders. 

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The Scoop on the GMVD Stock Spike

As mentioned above, GMVD has seen some seriously volatile movement since it dropped news that it received two new United States patents on January 5th. Here are the details of those patents:

  • METHOD, DEVICE AND SYSTEM FOR NON-INVASIVELY MONITORING PHYSIOLOGICAL PARAMETERS: This patent is related to a sensing mechanism that allows a monitoring system to analyze the sensing condition before and during continuous monitoring of physiological body signals. The sensing condition analysis looks at pressure, ambient temperature, light, conductivity, and other parameters. As a result, sensing is more accurate and fewer false alarms take place. 
  • JACKET FOR MEDICAL MODULE: The company also received a patent for a device that acts as a smartphone flip case but allows consumers and patients to carry their monitoring devices in the case with their phones. This makes it easy for patients to monitor their vital signs and other parameters anywhere. 

What Is G Medical Innovations?

Although GMVD stock is flying, we spotted the first red flag when we looked for the company’s website. It seems non-existent. Here’s a screenshot of what you get when you search Google for “G Medical Innovations:”

OK, I should rephrase that. The domain name for the company, “gmedicalinnovations.com,” exists. However, when you load the site, you get the following:

So, we had to do some digging to get a better understanding of the company. We started by reading through press releases and followed up by digging through the company’s SEC filings. Here’s what we were able to find out:

  • The Company: G Medical Innovations Holdings is what you would expect if a healthcare company and a technology had a baby. The company’s central focus is on the development of mHealth and telemedicine solutions and monitoring service platforms. Think of medical devices mixed with software as a service concepts in the healthcare industry. 
  • Core Areas of Focus: G Medical Innovations hopes that its innovative solutions result in better outcomes for patients with cardiovascular, pulmonary, and endocrine diseases and disorders. 
  • Mobility: The company’s products show that its core interest is in mobile medical devices. It’s flagship product, Prizma, is a medical device that’s currently under development. Prizma is designed to turn any smartphone into a medical monitoring device – giving patients the ability to monitor their health from anywhere and empowering providers in the process. 
  • The Stock: GMVD stock has been on a run for the top for the past few weeks. On December 20, 2022, the stock was trading at about $2.00 per share. Today, GMVD shares are more than double that price, sitting at about $4.40 per share. Although there are strong fundamental reasons for the growth, investors should beware that the company is far from profitable and will likely need to raise more funds in the future. 

Should You Get Involved in GMVD Stock?

Ultimately, the decision to invest in any stock is yours and yours alone – and it’s important that you know that CNA Finance isn’t an investment advisor or broker-dealer. Our goal is to outline the information in an easy-to-digest way and let you make educated decisions. With that said, there are some people that should stay far away from this stock:

  • Investors: If you’re a long-term investor, GMVD isn’t likely to be a strong choice for you. The company is a clinical-stage medical device company. Sure, it does produce some revenue, but it’s far from profitable and even further from proving its ability to tackle a market in a long-term sense. Warren Buffett once said that you shouldn’t hold a stock for 10 minutes that you wouldn’t own for 10 years. Unfortunately, it’s far too early in the company to make any predictions as to where it might be in 10 years. 
  • Beginner Traders: Traders are attracted to tremendous volatility – the type of volatility we’ve seen from GMVD stock as of late. However, if you’re a beginner trader, this may not be the stock for you. At this point, fundamentals are out the window and GMVD is trading based on sentiment rather than data. In order to make a profit on a stock like this, you’ll need a deep knowledge of technical analysis and strong charting abilities. 

With that said, if you’re an experienced trader who knows their way around charts and technical ques, GMVD may be the perfect stock to consider getting involved in. 

Where Is GMVD Going From Here?

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There’s no telling with 100% accuracy where any stock is headed. GMVD is even more difficult to predict than others on the market due to its extreme volatility. With that said, I’m expecting a wild ride ahead. After a more than 42% gain Monday, we can expect a bit of a decline on Tuesday. Keep a close eye on technical indicators to determine where the stock may be headed afterward. 

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AMT Digital (HKD) Stock: Trade or Stay Away

Joshua Rodriguez
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0
AMT Digital (HKD) Stock: Trade or Stay Away

AMT Digital Inc – ADR (NYSE: HKD) has been on a wild ride since its IPO in July of 2021, when it launched its IPO, raising $124.8 million in the process. Although the company only generated $25 million in revenue before the launch of its IPO, within two weeks of trading, the stock skyrocketed to a market cap that put it firmly on the list of the top 30 most valuable companies around the globe. 

The wild ride hasn’t slowed yet. In fact, in the four trading days this year, the stock has traded in the range between $9.84 and $29.95 per share. If that’s not a wide gap, I don’t know what is. 

With all the movement in HKD stock, many are considering diving in. Before we get too deep into the article here, I want to let you know that if you’re looking for a buy-and-hold opportunity, this isn’t it. On the other hand, if you’re interested in trading some serious volatility, HKD may be just the stock for you. 

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What Is AMT Digital?

AMT Digital is most widely talked about as an Asian digital investment bank. However, that’s just one of the four legs of the business. These four legs include:

  • Digital Investments: This is the core of the opportunity everyone seems to be talking about. The company is making large investments in digital companies across Asia. 
  • Digital Financial Services: AMT Digital plans on building an intelligent, cross-market, digital financial services platform licensed to provide digital financial services in Asia. This is important as there are few licensed financial services in Asia. 
  • Digital Media, Content, and  Marketing: AMT Digital also has a department of the business that’s centered around digital media. They plan to build a comprehensive content library while producing revenue from digital marketing services. 
  • SpiderNet Ecosystem: The SpiderNet Ecosystem is designed to serve as a connectivity service between Asia-based businesses and entrepreneurs. The goal is for this ecosystem to spur innovation across Asia. 

Is HKD Stock a Good Investment?

Any time there’s significant hype around a stock that causes extreme upward movement, like what we’ve seen from HKD, beginners start to ask whether or not the stock is a good investment. Although HKD stock may be a strong one to trade, it’s not a good target as an investment. 

As mentioned above, the company only generated about $25 million in revenue before its IPO. Today, just a few short months later, it’s trading with a market cap of around $4.3 billion. That alone tells you that the stock is highly overvalued. 

Moreover, extreme volatility is dangerous for investors, but that’s exactly what we’ve seen from HKD stock. The stock has traded between $9.84 and $721.23 since the launch of its IPO, making it one of the most volatile plays on the market today. 

Is a Short Squeeze Coming?

Trading and investing are two completely different concepts. While high levels of volatility are concerning for investors, they’re exactly what traders are looking for – and HKD stock is far from short on volatility. 

As such, this may be a very strong trade to consider. However, now may be the time to take a bearish stance on the stock. All over social media, traders are talking about a short squeeze on the horizon, but that’s highly unlikely. 

For a short squeeze to happen, there has to be a large number of shares sold short. The idea is that as the price of the stock heads up, short sellers must cover their positions by purchasing shares. This pushes buying volume up, causing significant upward movement. 

However, in order for a short squeeze to happen, there has to be a large short interest on the stock. That’s not the case here. At the moment, only about 1% of HKD shares are sold short – meaning there’s no chance of a short squeeze. 

So, Why Is There So Much Movement in Hkd Stock?

This is the million-dollar question, and nobody seems to have the answer. Even AMT Digital doesn’t know what’s going on according to statements made by the company’s management. Here’s what we know:

  • Meme Stock: Some traders have suggested that the movement is the result of meme stock activity. However, for there to be a meme stock, people need to talk about it on social media often. That doesn’t seem to be happening here. 
  • Short Squeeze: Some have suggested that the significant movement is the result of a short squeeze, but that doesn’t seem to be the case either. There’s simply not enough short interest on the stock for a short squeeze to take place. 
  • Volume: Regardless of this not being a meme stock or a short squeeze, volume is crazy. Friday’s volume alone was over 21 million shares. 

The bottom line is simple. Nobody seems to know why HKD stock is on such a wild ride, but traders are loving every minute of it.

Should You Trade HKD Stock?

This is the million-dollar question. First and foremost, if you’re a long-term investor or a novice trader, this isn’t the stock for you. AMT Digital is riddled with risk and there’s no telling which direction the stock is headed next. 

On the other hand, if you’re an advanced trader, HKD stock may present a significant opportunity. As you know, any time volatility is high, movement in the market is commonplace – and as a trader, you have the opportunity to take advantage of that movement. 

However, if you plan to do so, it’s important that you’re well-versed in technical analysis. There are little-to-no fundamental ques that tell you where HKD shares are headed next. So, it’s important that you’re able to get your ques from the chart. 

Where Is HKD Headed Next?

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The truth is, nobody knows. If I was just looking at the pre-IPO fundamentals of the stock, I would have never guessed it would have flown so high so fast. What I do know is that, at present, HKD stock is significantly overvalued. As such, I’d be making my bets with the bears. However, as HKD has proven since the launch of its IPO, there’s no telling what’s going to happen next. 

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