The founder of the Irish Institute of Financial Trading, Peter Brown, said the "stunning" 36,000 per cent stock price rise of CYNK Technology – a social network with one employee and no revenue – is an indicator of the "sometimes out of control" nature of investment in technology stocks in the race to find "the next Facebook, Twitter or Instagram".
Trading of the company’s shares were halted by the US Securities and Exchange Commission (SEC) on July 11th, have risen from 10 US cent per share in mid-June to a peak of $21 and a market value of $6 billion.
Headquartered in Belize, CYNK (pronounced "cynic") is apparently built around a showbusiness and business leader introduction "social marketplace" called IntroBiz, which operates from a basic looking website.
While “very rare”, Brown said situations like the CYNK stock rise “can happen, especially with tech stocks”.
Despite concerns over CYNK being expressed by a number of online commentators early last week, it was only on Friday, after more share-price fluctuation, that the SEC halted trading, citing “concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in CYNK’s common stock”.
"If I was a regulator I'd be trying to learn lessons from this because it is their job to try and stop things like this happening," said Ronan Lyons, assistant professor of economics at Trinity College Dublin.
The machinations of CYNK are, unsurprisingly, complex. Its one employee, Javier Romero from Belize, has denied that he's the CYNK CEO.
Company founder John Kueber, meanwhile, has said he sold all of his CYNK shares to Kenneth Carter, a friend of his brother Phil Kueber.
Lyons said that “traders have been betting on stock they don’t know much about “since the late 1710s, early 1720s”.
