Why Did LOBO Plunge 12.95% Despite Strong Earnings?

On July 15, 2025, LOBO experienced a significant drop of 12.95% in pre-market trading, reflecting a notable decline in investor sentiment.

LOBO's recent performance can be attributed to several factors. The company's strategic partnerships and mergers have been a key driver of its stock price movements. For instance, the announcement of a merger with THPlasma in an all-stock deal valued at $59 million plus $20 million in earnouts has been a significant catalyst for LOBO's stock price. This merger brings guaranteed sales agreements worth $100 million annually and projects strong revenue growth from $10 million in FY2025 to $32 million in FY2026. The merger is set to close in Q4 2025, with THPlasma's CEO, George Chi, taking leadership roles.

Additionally, LOBO's involvement in AI-driven initiatives has also garnered attention. The strategic partnership with HYPRCOMMUNITY to launch an AI-driven VTuber social platform, aiming to reach over 1 billion users across key global markets, has been a positive development for the company. This move follows a steady pattern in the previous four sessions, with modest changes, suggesting today's jump is primarily news-driven rather than a technical rebound or correction.

LOBO's recent financial performance has also been a factor in its stock price movements. The company's announcement of preliminary Q4 FY’25 results, highlighting 100% organic revenue growth to $3.5 million and achieving positive adjusted EBITDA, has been a significant driver of its stock price. The surge was mainly driven by strong Department of Defense contract performance and a solid cash position of $6.85 million with no debt. Recent trading sessions showed building momentum, with gains of 11.89% on Jul 11 and 4.37% on Jul 14, suggesting today’s move is a continuation of bullish sentiment fueled by robust financial results.