CYNK Technology Corp (CYNK) stock plummeted 85% on Friday after the SEC’s trading suspension was lifted. Previously, the stock’s trading in the OTC market was suspended for two weeks by the Financial Industry Regulatory Authority (FINRA), due to an “extraordinary event” from July 11.
As per its SEC filing in August 2012, CYNK was incorporated as Introbuzz in May 2008 in Nevada. It changed its name to CYNK Technology Corp in June 2013. It describes itself as a developmental stage company which provides “referral service for introductions.”
The company is basically offering human capital, providing a platform for its users to interact with people and form useful connections or networks through its website, introbiz.com.
As stated numerous times in the company’s filings, it believes that people like to show off their connections and are willing to pay to make more meaningful connections that may help them get ahead in their lives.
In June, CYNK stock soared over 20,000%, a ludicrous amount. Regulatory authorities were alarmed by the fact that a company with no assets, no revenues, and just one employee reached a value of about $6 billion for an hour on July 10.
In fact, at one point the company was worth more than Spotify, AOL, Inc. (AOL), and Zynga Inc (ZNGA). The stock jumped from a price of 10 cents on June 17 to almost $22 on July 10, initiating speculations among investors of a pump-and-dump scheme.
Trading on the stock was suspended due to concerns over “potentially manipulative transactions” and about the “accuracy and adequacy of information in the marketplace.”
CYNK started trading on OTC markets on July 29, 2013, at a price of 24 cents. Since then, the stock has been traded on 43 days only. The average volume traded before June 17 was about 7,000 shares in one trading day. Since then, however, this figure has averaged almost 140,000 shares.
The business model involves three players: the “seekers” are those who want to make new social connections, the “targets” are the people that seekers want to get introduced to, and the bridges between the two are called “mavens,” who have numerous contacts.
The website has posted pictures of popular actors like Johnny Depp and Angelina Jolie and claims that its members can get introduced to them. However, one can only get the contact details of the celebrity’s agent or publicist and no real access to the celebrity. Furthermore, the member will have to pay a fee of $50 to either maven or the target. So, people can earn money through their social network.
No further details are given on how this money can be transferred.
After the suspension was lifted from the stock on Friday it plummeted to $2.1 and now has a market capitalization of $600 million.