Borislav Tonev

CYNK Technology Corp (OTCMKTS:CYNK)'s Value Gets Halved

by Borislav Tonev July 2, 2014
CYNK.pngA couple of weeks ago, CYNK Technology Corp (OTCMKTS:CYNK, CYNK message board) absolutely exploded onto the penny stock scene. Some people on Twitter started talking about the company and, as a result investors traded more than $400 thousand worth of shares in six and a half hours. At the same time, the ticker jumped from its previous close of $0.06 and surged all the way to a mind-bending $2.25.

At that point, CYNK's market cap hovered around $660 million and when we covered the violent climb, we mentioned that the company doesn't really have what it takes to justify that sort of valuation. We weren't the only ones sharing this opinion. A Seeking Alpha article appeared a few hours after our coverage and its author (who disclosed a short position) also agreed that CYNK, with its $39 in total assets, doesn't deserve its market cap.

Plenty of people expected to see the stock tumbling down to the sub-dollar levels, but surprisingly or not, it managed to hang on. What's more, on June 23, it jumped once again and added another 90% to its value. This was followed by a crash, but the significant dollar volumes meant that a lot of people were paying attention.

That, apparently, was enough for yet another jump and yet another crash. On Monday, CYNK surged up the charts and gained a whopping 111%. It hit an all-time high of a mind-boggling $6.75 and finished the day at $6.25. Yesterday, however, it annihilated 51.36% of its value which means that it currently stands at $3.04 per share.

As you can see, the performance is absurdly inconsistent and yet, judging by the buzz around the social networks and discussion boards, some people believe that this is about to change. Is this really the case, though?

We're about to find out. But while we're waiting, we might as well take a look at the company once more and see if anything has changed.

The market cap has. Even after yesterday's crash, it stands at a ridiculous $1.2 billion. At the same time, CYNK's latest financial report is still the one covering the quarter ended March 31 and it still says that the Belize-based company has $39 in total assets.

On the bright side, their website is now working (which wasn't the case when we covered them previously). On June 27, CYNK announced that their IntroBiz portal is now back up and running and that it's been moved to a new server which is better suited to cope with the expected traffic flow. This means that we can open the website and see what CYNK's business plan is.

The home page is full of pictures of celebrities and when you click on each one of them, CYNK invite you to buy contact information. More specifically, "emails and phone numbers to the artist's talent agent, publicist, legal representative, etc.".

CYNK_logo.pngConsidering the widespread use of Google Inc (NASDAQ:GOOG)'s powerful search engine nowadays, this revenue generation plan seems a bit strange, but, in any case, it might just work and CYNK might just be able to show us something more significant in their future reports. Until that happens, careful research and consideration of all the risks (judging by the wild swings, there's a lot of them) is absolutely essential.

Half an hour after today's opening bell, CYNK is another 10% down.

Comments 1

1. Guest
July 10, 2014, 10:28PM

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