Trading Suspended on Mysterious Company Worth $4 Billion Despite Making No Money
The U.S. Securities and Exchange Commission suspended trading Friday of Cynk Technology Corp., a mysterious social network operator whose stock price skyrocketed, despite having no members, no revenue, and no assets.
.The U.S. Securities and Exchange Commission suspended trading Friday of Cynk Technology Corp., a mysterious social network operator whose stock price skyrocketed, despite having no members, no revenue, and no assets.
The SEC ordered the stoppage because of "concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in Cynk's common stock."
Cynk's stock jumped 23,067 percent in the past month from just a few pennies to $13.90, making the company worth more than $4 billion. The surge began in May, after closing at 6 cents on the 15, and then jumping 3.650 percent to close at $2.25 on June 17.
The company's background is just as baffling. Its most recent SEC filing, by Cynk's lone employee Marlon Sanchez, listed its headquarters at an office building in Belize City, Belize, but its suite does not exist, the building secretary told Bloomberg. And its website, introbiz.com (plastered with pictures of celebrities it offers to buy contact information for) appears to have been registered by the Scottsdale, Arizona-based Domains By Proxy.
Jacob Frenkel, a securities attorney at Shulman Rogers and a former SEC enforcement official, told The Wire Cynk's appearance as a small tech company made it a challenge for the SEC to track.
"History suggests that there is a lot of momentum and interest in these companies," he said. "There's always greater volatility in the penny stocks. If the SEC were to stop trading in every small cap stock just because of a 6 cent to 20 cent price rise, it would be issuing dozens of trading suspensions with regularity."
A call placed to the number Cynk listed on its last quarterly filing to the SEC yielded the message, "You have reached an unassigned number."