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 $4.7 billion (£2.7 bn). 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. The financial news website Zero Hedge said, “we must sadly conclude that the company is nothing but a fraud”.
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 $5 billion in market cap in a few days.
Zero Hedge, a financial news website
The stock trading at six cents on June 16 inexplicably 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 $4 billion 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 $1.5 million. Analysts note that the market value is merely on paper, based on trades of a small number of shares.
The company is no more of a functional business than your average college student’s entrepreneurial dream. Cynk has ‘stynk’ written all over it and we think the best approach to this stock is to avoid it entirely.
Richard Green, Briefing.com