CYNK Technology comes back from suspension with 80% drop
Jul 25, 2014 at 3:37 pm in General Trading by contrarianuk
I wrote about the obscure and infamous social networking company, CYNK Technology, back in mid-July following its suspension by the US SEC. The SEC halted trading of the shares on July 11th, when it made the following annoucement: “The Commission temporarily suspended trading in the securities of CYNK because of concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in CYNK’s common stock”. The shares came into the SEC’s sights after a meteoric rise in the CYNK’s shares over a month.
Today the shares have come back from suspension and are currently down from $13.9 to $2.5, an 82% drop, and they have traded as low as $2.
CYNK trades on the US over the counter market meaning it does not trade on any official exchange and rose an amazing 23,000% between June 16th and July 11th. They were $0.06 per share on June 17th and increased in value to over $21.95 at one point, a 36,000% rise. A 36,000% rise is pretty spectacular when not one piece of company news was released! At its peak the company was valued at $6 billion, despite accounts showing that it had no revenues from May 2008 when it started until the end of September 2013, with zero assets and an accumulated loss over the five-year period of $1.5m. When the SEC suspended the shares, the market cap was still $4 billion despite little evidence of assets or profitability. Speculation on Twitter and Facebook drove speculators into the stock in a big way, and today the bubble was well and truly burst. Many are asking why it took so long for the regulators to act in the first place given the obvious hysteria and manipulation on this once penny stock turned multi-billion dollar company.
Contrarian Investor UK
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