Cynk shares have gained 24,000% in the last few weeks, and no one seems to know why. In an exclusive interview with BuzzFeed, one of the company’s founders recounts its origins.
Cynk Technology, an unknown social networking "referral service for introductions" whose stock gained more than 24,000% over the course of a few weeks, traces its origins back to a Las Vegas event promoter named Kenneth Carter, who told BuzzFeed his original ambition was to make money connecting Jay-Z and Lady Gaga to their fans.
Carter, or Kenny Blaque as he is professionally known, is listed on a public securities filing from January 2012 as the sole officer and director of Introbuzz, which is described as a service for celebrities to interact with their fans. Introbuzz was the precursor to Cynk, whose meteoric share price rise from around ten cents to $14.71 at the close of trading Wednesday, remains a mystery to both the financial world and even the company's own former auditor.
According to a November 2013 filing with the U.S. Securities and Exchange Commission, Cynk had a net loss of just under $1.5 million through last September and has lost a total of $1.58 million since it began operations in May 2008. The filing lists no assets and says the company "has not yet emerged from its development stage, has not established an ongoing source of revenues sufficient to cover its operating cost."
Yet the company has raised $60,300 from issuing stock, and now has 291 million shares worth around $5.9 billion based on the price today of $20.19. (The company's tiny number of traded shares mean there's not actually anywhere near that much money at stake.)
A rampage of tweets from mid-June advertising how fast Cynk's stock was rising caught the attention of the financial blog Zero Hedge and quickly turned Cynk into a one stop punchline for internet companies whose stock price far outweighs their fundamental value.
In an exclusive interview with BuzzFeed, Carter, who is no longer affiliated with Cynk, recounted the company's strange origin story.
Cynk's stock rose from under 10 cents to $14.71 yesterday in a few weeks, a gain of more than 24,000%.
Bloomberg
Carter said he created a software product that would let celebrities interact with their fans for a fee and partnered with John Kueber, a Seattle-based publisher and entrepreneur, who owned a company called Introbuzz. As part of their deal, Kueber sold 6 million shares that Introbuzz issued to him in 2008 — the company's entire share base at the time — to Carter for $600. The price of the stock, which would trade in the over the counter markets, far away from any established stock exchange, was listed at 5 cents.
"I created some serious software," said Carter.
Carter said he had made contacts with major artists like Jay-Z and Lady Gaga and was looking to raise about $120,000 for his venture. "We believe that people will pay for introductions that are meaningful since it can save or create significant value to someone's life," the company said in the 2012 filing. "Introbuzz plans to provide a natural platform to enable celebrities to raise money for causes in a seamless, meaningful and hassle free-way." The filing went on to list examples such as "a celebrity pop singer [offering] feedback on an aspiring music stars' new song."
But, in a letter sent to Carter, the SEC said that "references to recording artists and contacts in the sports and entertainment industry in Mr. Kenneth Carter's management biography appear promotional in nature and irrelevant to Mr. Carter's experience, qualifications, attributes or skills as an officer of Introbuzz."
Kuebler declined to answer questions when reached by BuzzFeed by phone Wednesday and instead asked for the questions in an email. He did not respond to the email. His LinkedIn page does not mention Introbuzz, but does refer to him founding "several successful technology businesses" along with "several other ventures that are blemishes on an otherwise decent record."
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