Cynk Tech plummets 85 percent as trading suspension ends




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NEW YORK – Cynk Technology plummeted to close down about 85 percent Friday after a trading suspension lifted, but stock only being exchanged in private deals.

plunge largely reversed a that saw stock rise more than 20,000 percent in a matter of weeks, hitting an intraday of $21.95 July 10, a day before regulators stepped in to halt trading, citing concerns about manipulation.

Based in Belize, Cynk became one of market’ biggest stories as volumes soared and the social media company briefly became valued at more than $6 billion, despite having no revenue and being described as a “development stage” company.

Brokerages can trade in a company whose were previously suspended in the so-called “grey market,” but only at buyers’ or sellers’ request. Firms are not allowed to solicit orders.

Given the stock’ history, the fact that it still trading at a price enough to make it worth $600 million was a surprise to some.

“The stock should be trading near zero to pennies,” said John ‘Chip’ Buckman, managing director at Buckman, Buckman & Reid, a Shrewsbury, New Jersey-based brokerage firm, which had held a short position in the before the suspension.

“I would guess there’ been so much action in the stock that it’ still getting some play investors.”

Buckman said he didn’t know if the position the firm held in Cynk had been closed and said wouldn’t be able to comment that until after the close of trading Friday.

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Cynk shares ended down 85 percent at $2.10, with 563,000 shares changing hands.

Before mid-June, the stock had only traded a handful of shares on three days in 2014, but volume exploded in what some was a “pump and dump” scheme where investors talk up little-traded stocks in order to inflate their value. In this case, short-sellers were caught with losses due to the lack of liquidity in the shares as the stock soared.

One of those who lost money was Tom Laresca, who claims he lost his job at Buckman, Buckman & Reid after he was unable to cover his short position in the shares as losses increased. The firm said he did not manage his position properly.

OTC Markets Group, where the stock had traded prior to its suspension by the . Securities and Commission, was not used for the trades, a spokeswoman for OTC Markets said.

The Financial Industry Regulatory Authority had halted trading in the stock just before the SEC.

The company was previously known as Introbuzz, and had an office in Las Vegas, according to Regus, the management firm that rents space in the business center where Cynk was located. However, Regus said Cynk left in June.

Meanwhile, the company’s listed address at the Matalon, Coney Drive, Suite 400 in Belize does not have a Suite 400, a receiptionist there told Reuters weeks ago.

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