If you thought the potato-salad Kickstarter story was a crazy example of free markets run amok, here's one that's even more surreal: A social-media company called CYNK Technology is exploding in the stock market, with shares up more than 25,000 percent since the middle of June. If you've never heard of CYNK Technology, you're forgiven — the company has no assets, no revenues, and a single employee. It's not even clear if the company's social network, IntroBiz, has any members.
And yet, Wall Street is going nuts over CYNK. As of today's close, the company's market value is over $4 billion, making it more valuable, on paper at least, than companies like JetBlue and the New York Times.
What the hell is going on? Is this some sort of coordinated stock-market prank? Or just a sign that we're in another tech bubble? Judging from the tweets about CYNK, even market experts are flummoxed by the company's quick, inexplicable rise:
just discovered $CYNK... If you ever need a good laugh and a sure thing for a short position - your welcome.— Nicholas Pollari (@NicoPollari) July 9, 2014
Who trades garbage like $CYNK? Based in Belize…registered in Nevada…has only one exec. God love bull markets.— Herb Greenberg (@herbgreenberg) July 9, 2014
You guys don’t understand CYNK and you’re valuing it like a Web 2.0 stock. On a Price-to-WTF basis, it’s clearly cheap.— Downtown Josh Brown (@ReformedBroker) July 9, 2014
Business Insider's Myles Udland dug through CYNK's public financial statements and found nothing to explain what's happening to its stock price. CYNK Technology has only a single employee listed — Marlon Luis Sanchez, who appears to be CYNK's president, CEO, CFO, chief accounting officer, secretary, treasurer, director, and majority shareholder. It's not clear where the company is based, and it reported no revenue — zero, zilch, nada — for each of the past three years. It's not even clear whether the company's apparent product — a social network called Introbiz that allows members to "both buy and sell the ability to socially connect to individuals such as celebrities, business owners, and talented IT professionals" — is open for business.
Clearly, something funny is going on. Until we figure out what's happening with CYNK, it's probably best to keep it out of your retirement portfolio.