July 24 A trading suspension in the stock of
little-known Cynk Technology, which mysteriously
surged 20,000 percent before the halt, ends late on Thursday,
but do not expect to see the stock trading again on Friday.
Shares of the Belize-based social media company, which were
traded on over-the-counter exchanges until the suspension on
July 11, soared over a few weeks despite having no revenue and
being described as a "development stage" company. At one point,
Cynk was worth more than $6 billion.
The swiftness of the rally in what had been a little-traded
penny stock prompted a temporary suspension by the U.S.
Securities and Exchange Commission that expires at 11:59 p.m.
EDT (03:59 GMT) Thursday.
The suspension was implemented to protect investors,
according to the SEC. Since then, there has been no comment from
the company nor regulator, and no new information has emerged to
explain the stock's meteoric rise.
As the suspension expires, brokerages said the chances of
the stock resuming trading are slim at best.
More than likely, the stock will only ever again trade in
the so-called "gray market," because no brokerage firm is likely
to be willing to make a market in the shares. Without a broker
to quote or advertise the stock, it can be nearly impossible to
locate shares to trade.
Brokerages wanting to market the stock must file a form with
FINRA, explaining that they are satisfied with any updated
Cromwell Coulson, president and chief executive at OTC
Markets Group, which operates the OTC Pink market on which Cynk
had traded, said last week the stock is not likely to be
publicly quoted again because no broker will be able to file the
appropriate paperwork with regulators.
Among the investors hurt by the sudden rally were those
shorting the shares - borrowing and selling in expectation of it
dropping. That can be dangerous with stocks that have little
liquidity, like Cynk, that go on a sudden run. Shares at one
point hit $21.95 on July 10 before closing at $13.90 that day,
the last day it was traded.
The SEC and the Financial Industry Regulatory Authority, or
FINRA, which imposed the suspension, both declined to comment on
(Reporting By Suzanne Barlyn and Rodrigo Campos; Writing by
David Gaffen; Editing by Cynthia Osterman)