Attention everyone, meet

Screen Shot 2014-07-12 at 9.13.45 AM is a social media website, started by this man:

Screen Shot 2014-07-12 at 12.40.16 PM

Kenny Blaque AKA Kenneth Carter is an events promoter from Vegas. His business idea:

Screen Shot 2014-07-12 at 9.14.32 AM

That is:

  1. If you’re connected, monetise your connections by selling a slot of your time! And
  2. If you want to get connected, pay someone famous to meet with you!

In pictures:

Screen Shot 2014-07-12 at 9.15.01 AM

And a meeting with Angelina Jolie will set you back by the same $50, apparently:

Screen Shot 2014-07-12 at 9.15.20 AM

In case you thought this was a scam, don’t feel like you’re alone. Here are all the introductions that took place recently:

Screen Shot 2014-07-12 at 9.15.53 AM

Cynk (the owner of the site) has never sold a single thing. An income statement:

Screen Shot 2014-07-12 at 9.16.26 AM

It also recently moved to Belize:

Screen Shot 2014-07-12 at 9.18.40 AM

Despite this, Cynk traded over the counter on a (relatively) unregulated exchange. Also despite the fact that it stopped submitting financials. Oh, and Kenny severed ties with the company – which now belongs to Marlon Luis Sanchez (“President, Chief Executive Officer, Chief Financial Officer, Chief Accounting Officer, Secretary, Treasury and Director” according to this SEC filing).

And now:

Screen Shot 2014-07-12 at 9.17.19 AM

In case you missed it in the bottom righthand corner there in green, the return on the share since June 16th: 23,066.67%

To put that into perspective, the return on Apple Shares since they first listed in 1980: ±18,000%

Unsurprisingly, the SEC suspended trading of Cynk shares on Friday:

It appears to the SEC that the public interest and the protection of investors require a suspension of trading in the securities of Cynk Technology Corp (“Cynk”) because of concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in Cynk’s common stock.

In fact, the only surprising part is that it took the SEC almost a month to realise “Hey! Here’s a company from Belize that’s never made a sale, that owns no assets, and that has only one employee – and its shares are going crazy. Surely, um, not?”

So here’s a beginner’s guide to manipulating the market.

A Beginner’s Guide To Manipulating The Market

Option 1: Attract The Very Foolish

  1. Two of us start a company and each take a million shares. It does nothing but set up a shady website.
  2. Today, I sell you a million shares for $4 each (company is “worth” $8 million).
  3. Tomorrow, you buy a million and one shares back from me at $5 (company is now “worth” $10 million).
  4. The next day, I buy a million and two shares back from you at $6 (up to $12 million).
  5. The market looks at these transactions, and sees a lot of volume moving, and the share price rising.
  6. The market’s interest is piqued.
  7. Some foolish people think “No smoke without fire – must be something happening that everyone else knows”
  8. So they move in to buy up some shares just in case (“throw 50 grand at it” – that sort of thing).
  9. A week later “Oh dear, it was all a ruse” and the share price plunges back down.
  10. But in the meantime, we unloaded some stock.
  11. So we take the punters money and flee.
  12. Sure, it’s all highly illegal.
  13. But I’m in Belize.

Option 2: Attract the Foolish People That Think Everyone Else Is Foolish

  1. Start company as above.
  2. Then place some shares with a stock-lender.
  3. Again, today I sell you a million shares for $4.
  4. Tomorrow, you buy a million and one shares back from me at $5.
  5. The next day, I buy a million and two shares back from you at $6.
  6. The market looks at these transactions, and sees a lot of volume moving, and the share price rising.
  7. The market’s interest is piqued.
  8. Some savvy-but-not-savvy-enough investors look at this and say “Oh this is such foolishness – the company has no assets and is definitely a scam!”
  9. So “Let me see if I can short-sell some of the stock before this bubble crashes,” and “How I love me a tech bubble.”
  10. Then after they shop around and find that stock-lender from step 1, “OMG you can’t be serious – there’s actually stock to borrow and short-sell! Hellz yeah. People are such fools.”
  11. So they borrow the stock, and sell it in the market.
  12. I then go back to the stock-lender and say “Actually, totes changed my mind, can I please have my stock back?”
  13. So the stock-lender says to the short-sellers “Hey guys! Bad news – the holder wants his stock back. Please purchase it in the market, thanks.”
  14. And the short-sellers go a little pale, because the stock is being called before the bubble bursts (obvs – because you and I are the orchestrators of said bubble, and we won’t let it burst yet).
  15. So they’re forced to go out and part with their money by buying stock from me at any price I want, really.
  16. Still really illegal, but
  17. Belize*.
    *Full disclosure: I plagiarised this bullet point from this article.



For more, here’s a buzzfeed article: The Strange Story Behind The Meteoric Rise of An Unknown Pennystock (one-line summary – “This is a scam!”). And here’s an article from Zero Hedge: SEC finally gets involved (one-line summary – “Check out this idiot that got caught short-selling!).

Happy Monday.

UPDATE: seems that the whole thing was a glorious tale of money-laundering. Read about it here. Also, when the SEC finally allowed trading to resume, the stock price tanked.

Thanks Yahoo Finance
Thanks Yahoo Finance

My question though: why is it still trading for anything at all?

Rolling Alpha posts opinions on finance, economics, and the corporate life in general. Follow me on Twitter @RollingAlpha, and on Facebook at