How can a social network that no one has ever heard of suddenly be valued at more than $6 billion?
That’s what is happening with the one-time penny stock, Cynk Technology, which is up more than 100-fold since mid-June, bringing its market capitalization to more than $6 billion on Thursday. Yet the self-proclaimed social network has no revenue, no product, no assets and one employee.
If it’s true that there’s a sucker is born every minute, then many of them trade on the penny-stock market. As The Wall Street Journal wrote this week, the world of penny stocks is “a historical haven for con men and hustlers that the FBI says is “rife with fraud.”
Cynk’s various securities filings from 2012 to 2013 read like a satirical article from The Onion. Let us count the red flags:
The company’s business plan is vague and poorly written, containing gems like: “Instead of paying for a lunch that neither party wants to eat, parties can get down to business knowing that their time has been valued.” Here’s the full boilerplate from the IPO filing, when the company was called Introbuzz not to be confused with its proposed website, Introbizz.com, which is now actually Introbiz.com (emphasis ours):