NEW YORK: It has no assets, no revenues and no business plan to speak of. But a company called Cynk Technology has seen its value soar as high as $4.7bn.
Wall Street analysts have been at loss to explain the spectacular 24,000 percent rise in Cynk, which trades on the lightly regulated over the counter (OTC) market. While its share price and market value fell at the close of trade, the company unknown in the technology or financial communities for a time traded in the range of the value of firms such as Groupon, Pandora Media or Yelp.
“We must sadly conclude that the company is nothing but a fraud,” said the financial news website Zero Hedge.
“And it is nothing short of a testament to just how broken this excuse for a market is that a company with no assets, no revenues, no website and one employee can go from zero value to nearly $5bn in market cap in a few days.”
The stock trading at six cents on June 16 inexplicable surged to $2.25 the next day, and rose to as high as $16 on Thursday, before slipping to around $14 at the close — making its paper value still an eye-popping $4bn or so.
The company avoided scrutiny until its disproportionate value drew the attention of Wall Street veterans. The phone number listed on company documents was out of service.
Richard Green of the market analysis firm Briefing.com examined the company’s regulatory filing, which indicated Cynk had no assets, no cash and an accumulated loss of $1.5m.
Cynk calls itself a social network, based on its early incarnation as introbiz.com, which offered to put people in contact with celebrities like Angelina Jolie or Johnny Depp for $50.
“The company is no more of a functional business than your average college student’s entrepreneurial dream,” Green said.
“There was no news or other recognisable event to explain such stock trading activity.”
Analysts note that the market value is merely on paper, based on trades of a small number of shares. AFP
