On May 15, social network operator Cynk Technology Corp. closed at six cents per share on the stock market. On July 10, Cynk traded at $21.95 for one period during the day, a roughly 36,000 percent increase in under two months. Is Cynk the next big stock to jump on board?
The Securities and Exchange Commission (SEC) says not so fast, my friend. Due to perceived irregularities in the company’s stock, the SEC has suspended Cynk from trading.
The SEC announced that it was suspending Cynk “because of concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in CYNK’s common stock.” Before the SEC’s suspension announcement, the stock had also been stopped by the Financial Industry Regulatory Authority. The suspension as currently issued will last until July 24.
According to Bloomberg, Cynk’s meteoric rise had been making a stir among stock analysts. The company appears to have no members, revenue or assets, and the company only had one apparent employee with a base in Belize City, Belize. Because of its questionable nature, many cautioned against the company.
“The issue of stock manipulation, or perceived stock manipulation, particularly in the penny market, is extremely common, and it’s a challenge to the regulators,” said Jacob Frenkel, securities attorney at Shulman Rogers Gandal Pordy & Ecker PA, to Bloomberg. “Real companies get hurt when the entire space gets tagged as bad because of really bad incidents such as this.”
In the company’s November 2013 quarterly earnings report — the last it has filed with the SEC — Cynk reported a $1.5 million net loss with no profit for the first nine months of 2013, mostly due to stock-based compensation. Introbiz, Cynk’s website, offers the chance to buy contact information for certain people, including celebrities.