CYNK Technologies
July 10, 2014 10:21 AM Subscribe
"[I]t 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, adding 150%, or over $2 billion in market cap today alone." The strange story of CYNK Technologies. And while news of CYNK began spreading yesterday, the stock was, at one point today, oddly up another 57%, hitting a market cap of over $6 billion.
Pump and dump baby!
posted by Trochanter at 10:33 AM on July 10, 2014 [1 favorite]
posted by Trochanter at 10:33 AM on July 10, 2014 [1 favorite]
Market cap is a pretty useless measure of a penny stock. Just because you can get an idiot to buy a handful of useless shares for $10 per share doesn't mean that the other 300 million shares are suddenly worth $10 each as well.
posted by burnmp3s at 10:39 AM on July 10, 2014 [11 favorites]
posted by burnmp3s at 10:39 AM on July 10, 2014 [11 favorites]
I am doing this all wrong.
posted by adamrice at 10:40 AM on July 10, 2014 [6 favorites]
posted by adamrice at 10:40 AM on July 10, 2014 [6 favorites]
I'm not totally wise to the world of trading but I'm definitely having a prison is supposed to be a really hard place to get out of moment w/r/t the SEC and regulations for being publicly traded.
posted by griphus at 10:43 AM on July 10, 2014 [1 favorite]
posted by griphus at 10:43 AM on July 10, 2014 [1 favorite]
Wait — are they saying market cap is the (total number of shares outstanding) * (highest bid price)?
Because that's dumb. You have to take market depth into account especially on penny stocks.
posted by Kadin2048 at 10:43 AM on July 10, 2014 [1 favorite]
Because that's dumb. You have to take market depth into account especially on penny stocks.
posted by Kadin2048 at 10:43 AM on July 10, 2014 [1 favorite]
I genuinely believe that Stark Naked Bobbers has a long and prosperous future ahead of it.
posted by Legomancer at 10:45 AM on July 10, 2014
posted by Legomancer at 10:45 AM on July 10, 2014
Wait — are they saying market cap is the (total number of shares outstanding) * (highest bid price)?
Because that's dumb. You have to take market depth into account especially on penny stocks.
I mean its not dumb - its the definition of market cap. Its not telling you that you could sell this business on a market order today for that price.
For closely held businesses most of the indexation schemes take free float into account - which would basically rule out something like this because there is no free float.
Hence the amazing short squeeze and pump and dump. Hopefully someone goes to jail.
I've heard that if you can find borrow (which you and I can't) its priced at 120%
posted by JPD at 10:53 AM on July 10, 2014 [4 favorites]
Because that's dumb. You have to take market depth into account especially on penny stocks.
I mean its not dumb - its the definition of market cap. Its not telling you that you could sell this business on a market order today for that price.
For closely held businesses most of the indexation schemes take free float into account - which would basically rule out something like this because there is no free float.
Hence the amazing short squeeze and pump and dump. Hopefully someone goes to jail.
I've heard that if you can find borrow (which you and I can't) its priced at 120%
posted by JPD at 10:53 AM on July 10, 2014 [4 favorites]
no. In this case we actually have existing laws on the books that make pump and dumps criminal offenses.
posted by JPD at 11:09 AM on July 10, 2014 [5 favorites]
posted by JPD at 11:09 AM on July 10, 2014 [5 favorites]
Do they specialize in potato salad?
posted by mwhybark at 11:11 AM on July 10, 2014 [14 favorites]
posted by mwhybark at 11:11 AM on July 10, 2014 [14 favorites]
Just the other day a tiny bitcoin exchange had its entire order book bought out by someone who made a really stupid buy order, bringing the price of bitcoin up to 40,000 on that exchange. That did not make bitcoins worth 40k each.
posted by empath at 11:24 AM on July 10, 2014 [2 favorites]
posted by empath at 11:24 AM on July 10, 2014 [2 favorites]
This situation is unfortunately common in the over-the-counter/penny stock market. All retail investors see is the stock is going up and they want in for the ride up. Then it crashes.
Buying stocks in the US that don't trade on the New York Stock Exchange or NASDAQ is incredibly risky. While there's certainly cases of fraud on those exchanges, NYSE and NASDAQ at least try to root them out, and companies that trade on them have to meet some standards - like not trading for under a dollar a share (at least for very long.)
posted by joechip at 11:25 AM on July 10, 2014 [1 favorite]
Buying stocks in the US that don't trade on the New York Stock Exchange or NASDAQ is incredibly risky. While there's certainly cases of fraud on those exchanges, NYSE and NASDAQ at least try to root them out, and companies that trade on them have to meet some standards - like not trading for under a dollar a share (at least for very long.)
posted by joechip at 11:25 AM on July 10, 2014 [1 favorite]
Cynk Technology Corp., formerly Introbuzz, Inc., is a development stage-company. The Company intends to develop a social network business. Social networks are Web based services that allow individuals to post a profile and link their profile to other friends and organizations. The Company intends to develop a database of professional and other business persons, as well as other interested persons in providing and utilizing contacts.
I intend to do some things also. Some day.
posted by Big_B at 11:27 AM on July 10, 2014 [8 favorites]
I intend to do some things also. Some day.
posted by Big_B at 11:27 AM on July 10, 2014 [8 favorites]
"A social network with no members but a $6 billion valuation."
Yeah, that's the crystallization of it. If it's social media it must be good/valuable/one helluva investment, because Twitter and Facebook and Instagram and baby this could be the next thing. It could be a thing! And if you throw enough money at it, maybe it WILL become a thing. But you'd better get your money back out before it stops.
posted by kgasmart at 11:30 AM on July 10, 2014
Yeah, that's the crystallization of it. If it's social media it must be good/valuable/one helluva investment, because Twitter and Facebook and Instagram and baby this could be the next thing. It could be a thing! And if you throw enough money at it, maybe it WILL become a thing. But you'd better get your money back out before it stops.
posted by kgasmart at 11:30 AM on July 10, 2014
I intend to do some things also. Some day.
Shut up and take my money!
posted by nubs at 11:30 AM on July 10, 2014 [12 favorites]
Shut up and take my money!
posted by nubs at 11:30 AM on July 10, 2014 [12 favorites]
I was a victim of a papadum scheme on the Bombay stock exchange.
posted by Kabanos at 11:31 AM on July 10, 2014
posted by Kabanos at 11:31 AM on July 10, 2014
Business Insider has a look inside the company and its website, IntroBiz.com.
posted by tittergrrl at 11:33 AM on July 10, 2014
posted by tittergrrl at 11:33 AM on July 10, 2014
Please cynk yer money into my idea
posted by armoir from antproof case at 11:43 AM on July 10, 2014 [6 favorites]
posted by armoir from antproof case at 11:43 AM on July 10, 2014 [6 favorites]
And they are called CYNK Technology? Looks like whoever is in on the cabal secretly controlling the global financial markets is getting bored.
posted by Dr Dracator at 11:43 AM on July 10, 2014 [2 favorites]
posted by Dr Dracator at 11:43 AM on July 10, 2014 [2 favorites]
no. In this case we actually have existing laws on the books that make pump and dumps criminal offenses.
We have existing laws against threatening to kill State Department employees, too, but that doesn't seem to matter much these days when there's enough money on the wrong side of the law.
posted by saulgoodman at 11:54 AM on July 10, 2014 [1 favorite]
We have existing laws against threatening to kill State Department employees, too, but that doesn't seem to matter much these days when there's enough money on the wrong side of the law.
posted by saulgoodman at 11:54 AM on July 10, 2014 [1 favorite]
graphnerd: They're making the world a better place.
Please tell me that this was intended to be read in the voice of Chiwetel Ejiofor? ("I believe in something greater than myself. A better world. A world without sin.")
posted by RedOrGreen at 12:00 PM on July 10, 2014 [2 favorites]
Please tell me that this was intended to be read in the voice of Chiwetel Ejiofor? ("I believe in something greater than myself. A better world. A world without sin.")
posted by RedOrGreen at 12:00 PM on July 10, 2014 [2 favorites]
Those two dollar rips really add up.
posted by dr_dank at 12:00 PM on July 10, 2014 [2 favorites]
posted by dr_dank at 12:00 PM on July 10, 2014 [2 favorites]
graphnerd: They're making the world a better place.Actually a Silicon Valley reference, so pretty much the exact opposite.
Please tell me that this was intended to be read in the voice of Chiwetel Ejiofor? ("I believe in something greater than myself. A better world. A world without sin.")
posted by cardboard at 12:08 PM on July 10, 2014 [1 favorite]
I really do not think it as much a testament of how broken the market is as the age old notion of "caveat emptor" and a sucker is born every minute--this is not a failure of the system (as it will eventually correct itself) but to the ability of technology to magnify and accelerate our human folly.
posted by rmhsinc at 12:10 PM on July 10, 2014 [2 favorites]
posted by rmhsinc at 12:10 PM on July 10, 2014 [2 favorites]
I'm pretty sure this isn't a pump and dump. (Where is the pump?) This is a "raise the value to attract short sellers then trap them then dump." So those of you cheering the comeuppance of Wall Street players -- I guess these guys are on your side, then? I mean, it's interesting and clever and manipulative as hell, but regular investors aren't getting burned here.
posted by (Arsenio) Hall and (Warren) Oates at 12:10 PM on July 10, 2014 [2 favorites]
posted by (Arsenio) Hall and (Warren) Oates at 12:10 PM on July 10, 2014 [2 favorites]
Alternative theory circulating on Twitter: the company went through a 75:1 reverse split and is just delinquent with their filings. Market trackers are incorrectly stating that it's a $4 billion company when really it's still a $53 million company. I'm not sure how that's possible, but the fact that nobody knows what exactly is going on is relatively amusing.
posted by (Arsenio) Hall and (Warren) Oates at 12:37 PM on July 10, 2014
posted by (Arsenio) Hall and (Warren) Oates at 12:37 PM on July 10, 2014
(Arsenio) Hall and (Warren) Oates: I'm pretty sure this isn't a pump and dump. (Where is the pump?)
This Buzzfeed article has some additional details on the pumping (started on Twitter around June 17), as well as an interview with one of the founders (no longer affiliated with the company).
posted by clawsoon at 12:38 PM on July 10, 2014
This Buzzfeed article has some additional details on the pumping (started on Twitter around June 17), as well as an interview with one of the founders (no longer affiliated with the company).
posted by clawsoon at 12:38 PM on July 10, 2014
Probably a viral campaign for the sequel to Jack Ryan: Shadow Recruit.
posted by armoir from antproof case at 12:45 PM on July 10, 2014
posted by armoir from antproof case at 12:45 PM on July 10, 2014
Are a handful of obviously scammy tweets evidence of a pump? Basically every penny stock is pumped like that, and none of them see valuations of $6 billion. This seems to be something different, and a lot more interesting. Even today, with all of the volatility and the press, only 375,00 shares (about $5 or $6 million dollars) have been traded, even though there are apparently 291 million shares. If this were a pump and dump, wouldn't the guy who owns all of the shares be selling?
posted by (Arsenio) Hall and (Warren) Oates at 12:50 PM on July 10, 2014 [1 favorite]
posted by (Arsenio) Hall and (Warren) Oates at 12:50 PM on July 10, 2014 [1 favorite]
This is a "raise the value to attract short sellers then trap them then dump." So those of you cheering the comeuppance of Wall Street players -- I guess these guys are on your side, then? I mean, it's interesting and clever and manipulative as hell, but regular investors aren't getting burned here.
I have never heard of big investment firms shorting OTC penny stocks. It's not easy to do and is pointless considering that these are mostly fake or defunct companies. The only people who fall for penny stock scams are uninformed people who think they are getting a hot stock tip.
posted by burnmp3s at 1:02 PM on July 10, 2014 [2 favorites]
I have never heard of big investment firms shorting OTC penny stocks. It's not easy to do and is pointless considering that these are mostly fake or defunct companies. The only people who fall for penny stock scams are uninformed people who think they are getting a hot stock tip.
posted by burnmp3s at 1:02 PM on July 10, 2014 [2 favorites]
(Arsenio) Hall and (Warren) Oates: Even today, with all of the volatility and the press, only 375,00 shares (about $5 or $6 million dollars) have been traded, even though there are apparently 291 million shares. If this were a pump and dump, wouldn't the guy who owns all of the shares be selling?
The impression that I'm getting of this company is that a few million dollars is a lot of money for the parties involved. Only $54,000 was raised by an earlier share offering. Before that, Carter said that he purchased the whole company (6 million shares at the time) for $600. A few million dollars seems to me like it'd be enough to make a pump-and-dump seem worthwhile to a small-time promoter who's hustle hasn't gotten him anywhere yet.
Do we know whether the current owner of most of the shares has been selling?
This seems to be something different, and a lot more interesting.
I was tempted to buy a couple of shares for a hundred each myself, just for a laugh. With market cap logic, I would be instantly creating billions of dollars of value. Billions! I'd be a Job Creator, astride the market, a titan of capitalism!
I suppose that means I'd also have to plan a dramatic denouement for when those billions of dollars of value get destroyed by the cruel market. Hmm.
posted by clawsoon at 1:24 PM on July 10, 2014
The impression that I'm getting of this company is that a few million dollars is a lot of money for the parties involved. Only $54,000 was raised by an earlier share offering. Before that, Carter said that he purchased the whole company (6 million shares at the time) for $600. A few million dollars seems to me like it'd be enough to make a pump-and-dump seem worthwhile to a small-time promoter who's hustle hasn't gotten him anywhere yet.
Do we know whether the current owner of most of the shares has been selling?
This seems to be something different, and a lot more interesting.
I was tempted to buy a couple of shares for a hundred each myself, just for a laugh. With market cap logic, I would be instantly creating billions of dollars of value. Billions! I'd be a Job Creator, astride the market, a titan of capitalism!
I suppose that means I'd also have to plan a dramatic denouement for when those billions of dollars of value get destroyed by the cruel market. Hmm.
posted by clawsoon at 1:24 PM on July 10, 2014
You can't get borrow, so its not really about the short angle. The few guys I do know of who short frauds (and survive in the biz) would have covered long ago recognizing the big run up.
My theory is that its a pump and dump that just got out of control. The guys who did it are probably freaking out because now the AG is definitely going to take a look.
If this were a pump and dump, wouldn't the guy who owns all of the shares be selling? There may just be zero liquidity.
posted by JPD at 1:25 PM on July 10, 2014
My theory is that its a pump and dump that just got out of control. The guys who did it are probably freaking out because now the AG is definitely going to take a look.
If this were a pump and dump, wouldn't the guy who owns all of the shares be selling? There may just be zero liquidity.
posted by JPD at 1:25 PM on July 10, 2014
The few guys I do know of who short frauds (and survive in the biz) would have covered long ago recognizing the big run up.
But that's just it, right? If you had tried to cover "long ago" -- say, at $5, you would have been completely trapped. Or, to put it another way: with so little liquidity, how can you tell the difference between a pump and dump and a short squeeze?
posted by (Arsenio) Hall and (Warren) Oates at 1:28 PM on July 10, 2014
But that's just it, right? If you had tried to cover "long ago" -- say, at $5, you would have been completely trapped. Or, to put it another way: with so little liquidity, how can you tell the difference between a pump and dump and a short squeeze?
posted by (Arsenio) Hall and (Warren) Oates at 1:28 PM on July 10, 2014
This reminds me of the Economics 101 class I almost got kicked out of (in 1985) for "hacking". We had a stock market simulator and were given a random basket of "stocks' to "trade" with our classmates. It took me about 2 minutes to figure out that the stock price was only determined by the last "trade" within the class (remember this is before the internet, and the ability to use real market data, etc) ... and then find a classmate to get rich with... we dumped a stock back and forth to each other... getting the price to $0.01.... which our classmates quickly sold, en mass. We slowly bought all of them up... then sold each other 1 share for $99.99 (the max in the simulator). We repeated this until there was no more market to capture.
The instructors couldn't understand how we cleaned up so quickly, and figured since a computer was involved it must have been hacking.
Now I see that someone seems to have figured out how to game the big simulator we all have our retirement funds bound to in the real world. I'm not surprised.
posted by MikeWarot at 1:49 PM on July 10, 2014 [13 favorites]
The instructors couldn't understand how we cleaned up so quickly, and figured since a computer was involved it must have been hacking.
Now I see that someone seems to have figured out how to game the big simulator we all have our retirement funds bound to in the real world. I'm not surprised.
posted by MikeWarot at 1:49 PM on July 10, 2014 [13 favorites]
But that's just it, right? If you had tried to cover "long ago" -- say, at $5, you would have been completely trapped. Or, to put it another way: with so little liquidity, how can you tell the difference between a pump and dump and a short squeeze?
Well if you could borrow the stock that might be a more interesting question - but you can't really short this. Probably never could.
posted by JPD at 1:58 PM on July 10, 2014
Well if you could borrow the stock that might be a more interesting question - but you can't really short this. Probably never could.
posted by JPD at 1:58 PM on July 10, 2014
Now I see that someone seems to have figured out how to game the big simulator we all have our retirement funds bound to in the real world. I'm not surprised.
Except an illiquid penny stock that nobody trades has absolutely nothing to do with the actual market (and if your financial advisor does have your retirement account in illiquid penny stocks, you should fire them). It's a funny story, but not much more than that.
ZeroHedge will find any and every reason to call the market a fraud and predict the doom crash to zero. It's what they do. It's the equivalent of Fox News Channel for wannabe Austrian economists who are nutty about gold and bitcoins. People don't go there to learn anything about the market, they go there to read things they agree with.
posted by pravit at 1:58 PM on July 10, 2014 [13 favorites]
Except an illiquid penny stock that nobody trades has absolutely nothing to do with the actual market (and if your financial advisor does have your retirement account in illiquid penny stocks, you should fire them). It's a funny story, but not much more than that.
ZeroHedge will find any and every reason to call the market a fraud and predict the doom crash to zero. It's what they do. It's the equivalent of Fox News Channel for wannabe Austrian economists who are nutty about gold and bitcoins. People don't go there to learn anything about the market, they go there to read things they agree with.
posted by pravit at 1:58 PM on July 10, 2014 [13 favorites]
If this were a pump and dump, wouldn't the guy who owns all of the shares be selling?
I don't understand short squeezes (and many other things about the stock market) well enough to know whether what I'm about to ask is completely obvious, but could the owner who is not selling have a really big loan secured only by a portfolio which depends on this stock for a crucial part of its value, and which would quickly be underwater if this stock went down in price too much?
And so they can't sell because the stock would collapse before they could get rid of much of it, the loan would no longer be secured and would be instantly called, and they would have to declare bankruptcy and lose everything?
In that case, though, wouldn't they have to make absolutely sure the stock did not fall and so have to keep buying it under most circumstances, under the reasonable assumption that once it started to fall there would be no bottom?
posted by jamjam at 2:21 PM on July 10, 2014
I don't understand short squeezes (and many other things about the stock market) well enough to know whether what I'm about to ask is completely obvious, but could the owner who is not selling have a really big loan secured only by a portfolio which depends on this stock for a crucial part of its value, and which would quickly be underwater if this stock went down in price too much?
And so they can't sell because the stock would collapse before they could get rid of much of it, the loan would no longer be secured and would be instantly called, and they would have to declare bankruptcy and lose everything?
In that case, though, wouldn't they have to make absolutely sure the stock did not fall and so have to keep buying it under most circumstances, under the reasonable assumption that once it started to fall there would be no bottom?
posted by jamjam at 2:21 PM on July 10, 2014
Sooner or later Bruno arrives and pops the balloon with his cigarette.
*POP*
Adioski fake wealth.
posted by Pudhoho at 2:22 PM on July 10, 2014
*POP*
Adioski fake wealth.
posted by Pudhoho at 2:22 PM on July 10, 2014
That would be the case for marginable securities jimjam. Most OTC stocks are not eligible for use as margin collateral for this exact reason.
posted by dr_dank at 2:27 PM on July 10, 2014 [2 favorites]
posted by dr_dank at 2:27 PM on July 10, 2014 [2 favorites]
we live in a broken world if this sort of nonsense (take a look at the BI article; definitely some hanky panky going on there) is even allowed to happen in the first place
posted by feckless fecal fear mongering at 3:04 PM on July 10, 2014
posted by feckless fecal fear mongering at 3:04 PM on July 10, 2014
This is just a straight-up pump and dump to fleece naive small-time investors. Looking at the past month of volume, it looks like a little over-ambitious bit of pump-priming.
Late last month, they started trying to attract marks by putting out press releases on sleazy sites like this one.
The source for that press release is Superlative Stocks. They have a page linked in the press release for a "report" for CYNK.
For anyone interested about the whois for Superlative Stocks:
What we are witnessing here is what happens when the pump phase goes viral. Judging by the volume today (almost 400k shares) the dump phase is probably in full swing, and the scammers might get away with a few million dollars, if they can actually cash out before the hammer comes down.
posted by [expletive deleted] at 4:26 PM on July 10, 2014 [1 favorite]
Late last month, they started trying to attract marks by putting out press releases on sleazy sites like this one.
The source for that press release is Superlative Stocks. They have a page linked in the press release for a "report" for CYNK.
For anyone interested about the whois for Superlative Stocks:
Admin Name: WHOISGUARD PROTECTED
Admin Organization: WHOISGUARD, INC.
Admin Street: P.O. BOX 0823-03411
Admin City: PANAMA
Admin State/Province: PANAMA
Admin Postal Code: NA
Admin Country: PA
Admin Phone: +507.8365503
Admin Phone Ext:
Admin Fax: +51.17057182
Admin Fax Ext:
Admin Email: [32 random hex digits].PROTECT@WHOISGUARD.COM What we are witnessing here is what happens when the pump phase goes viral. Judging by the volume today (almost 400k shares) the dump phase is probably in full swing, and the scammers might get away with a few million dollars, if they can actually cash out before the hammer comes down.
posted by [expletive deleted] at 4:26 PM on July 10, 2014 [1 favorite]
Okay, so people 'long' or 'short' on a stock are trading on margin, which is to say, on borrowed money. If they're long, they're betting the price will go up, if they're short, they're betting the price will go down. A squeeze is when the price goes up or down enough in the wrong direction that they're forced out of their position to cover their losses and pay back the loan. If enough people are long or short, that can amplify the recent move as lots of people are forced to buy or sell stock to cover their losses at the same time.
posted by empath at 6:25 PM on July 10, 2014
posted by empath at 6:25 PM on July 10, 2014
Hmm, I know these types of services exist, but I just thought this was shady due to being based out of a Panamanian PO box.
Still, the fact that these people are hiding behind an anonimizer that a Google search shows to be highly resistant to subpoenas, and also appear to have timed press releases about this stock with the first big price jumps in June looks awful fishy. I'm still 100% sure this is a pump and dump.
posted by [expletive deleted] at 7:03 PM on July 10, 2014 [1 favorite]
Still, the fact that these people are hiding behind an anonimizer that a Google search shows to be highly resistant to subpoenas, and also appear to have timed press releases about this stock with the first big price jumps in June looks awful fishy. I'm still 100% sure this is a pump and dump.
posted by [expletive deleted] at 7:03 PM on July 10, 2014 [1 favorite]
Pulling this ticker up in Thomson One kind of looks like the data feed is broken.
posted by malocchio at 8:52 AM on July 11, 2014
posted by malocchio at 8:52 AM on July 11, 2014
being "long" a stock does not imply using margin.
posted by JPD at 9:30 AM on July 11, 2014 [3 favorites]
posted by JPD at 9:30 AM on July 11, 2014 [3 favorites]
Here is an explanation for what happened. Tightly held investors short squeezing like crazy. A new kind of fraud.
These guys have balls of steel.
posted by dios at 10:42 AM on July 11, 2014 [1 favorite]
These guys have balls of steel.
posted by dios at 10:42 AM on July 11, 2014 [1 favorite]
Tightly held investors short squeezing like crazy. A new kind of fraud.
Let me guess: Short squeezes are some kind of religious sacrament to them?
posted by saulgoodman at 11:42 AM on July 11, 2014
Let me guess: Short squeezes are some kind of religious sacrament to them?
posted by saulgoodman at 11:42 AM on July 11, 2014
« Older "Eventually, years later, I eat eggs again." | I've never seen a solo cup in the flesh Newer »
This thread has been archived and is closed to new comments
posted by graphnerd at 10:30 AM on July 10, 2014 [4 favorites]