Cynk Surges 36,000% as Buzz Builds for 1-Employee Company
The financial world has become obsessed with Cynk Technology Corp. (CYNK), a stock that sold for a few pennies for most of its existence before exploding more than 36,000 percent to give it a market value exceeding $6 billion.
Cynk supposedly operates a social network -- one that appears to have no members, no revenue, no assets and only one employee. The stock climbed as much as 49 percent to $21.95 earlier today in over-the-counter trading on volume of more than 380,000 shares before erasing its gain to close down 5.5 percent to $13.90. After closing at 6 cents on May 15 it began its surge with a 3,650 percent jump to $2.25 on June 17.
The price chart has been the talk of all manner of business blogs and Twitter pundits. Business Insider is leading with the news. The Wall Street Journal has listed all of the many ways in which Cynk is a risky investment. Zero Hedge, the blog that flagged Cynk’s moves on July 7, calls it “pure madness.”
“Most people that are paying attention to this think it’s a completely ridiculous move for a company with no earnings whatsoever,” Dave Lutz, the Annapolis, Maryland-based head of exchange-traded fund trading for Jonestrading Institutional Services, said in a phone interview. “The big question is: when the SEC is going to stop trading in this thing?”
SEC spokeswoman Judith Burns declined to comment on Cynk trading.
One Man Show
In a quarterly earnings report filed with the SEC in November 2013, Cynk reported zero revenue and a net loss of nearly $1.5 million for the first nine months of the year. Cynk’s one employee, Marlon Sanchez, has titles including president, chief executive officer, chief financial officer and secretary. A filing from last year showed he had a 72 percent stake in the company and another one three months ago showed there were only 30 shareholders of record. He could not be reached for comment.
On OTC Markets Group Inc.’s website, a page with Cynk’s stock quote includes an icon of a skull and crossbones that bears a warning to investors: “Buyer Beware. There is a public interest concern associated with the company, which may include a spam campaign, questionable stock promotion, known investigation of fraudulent activity committed by the company or insiders, regulatory suspensions or disruptive corporate actions.”
Cynk’s website, Introbiz.com, uses Go Daddy internet domain registrar and web hosting services. The site, created in June 2009, was registered by a Scottsdale, Arizona-based proxy company, Domains By Proxy, which promises to protect clients’ identities.
Introbiz offers services to buy contact information of various types of people, including celebrities such as Nicole Kidman and Johnny Depp. It is currently possible to create an account on Introbiz. Signing up requires agreeing to terms of usage and verifying the e-mail address used. In the box where the text of the terms would be, there is instead three lines repeating “This is the page of TERMS OF USAGE.”
Once an account is created, a user could use PayPal to deposit anywhere from $100 to $20,000 into the Introbiz account, which becomes “prepaid” cash. The user can also browse through lists of people whose contact information the site says can be bought with credit cards or PayPal.
The website says that for about $50, it is possible to purchase e-mails and phone numbers that would put the buyer in touch with celebrities.
There are five categories to browse through, and only the first two have any entries: business professionals, entertainment, technology, political, as well as investors and angels.
Cynk said in a filing that its headquarters are in Suite 400 of The Matalon, a Belize City, Belize-based office building. The Matalon does not have a Suite 400, said Tiffany Techeco, secretary of building. She also said there is no main company with the name Cynk Technology residing in The Matalon.
To contact the editors responsible for this story: Lynn Thomasson at email@example.com Ben Livesey, Michael P. Regan