Ever heard of IntroBiz? No? Well, apparently, it's the hottest new social network in town, with a valuation that has peaked at $6 billion. Aside from the fact that nobody has heard of this social network, IntroBiz has zero revenues, zero assets, zero products and only one employee. So how can a company that has flown under the radar amass so much value without anybody noticing?
IntroBiz.com, which markets itself as "the social marketplace," is owned by a company called CYNK Technology. Just less than a month ago, the company had a penny stock that was pegged at a meager $0.6 per share, but Thursday marks a meteoric growth in CYNK's stock prices to $15 per share. That's a 100-fold increase in valuation in such a short amount of time, making it even more valuable than established companies such as Domino's Pizza and the New York Times.
IntroBiz claims that its users can "buy and sell the ability to socially connect to individuals such as celebrities, business owners, and talented IT professionals." For a small sum of $50, users can purportedly receive the private contact information of Hollywood A-listers the likes of Nicole Kidman, Leonardo DiCaprio and Angelina Jolie from a user named artistblackbook, one of the website's two featured "socialites." The user has apparently 750 sales, supposedly introductions to celebrities, and received a five-star rating from 252 votes.
However, artistblackbook and worldtalent, the other "socialite" in the featured section of IntroBiz, have zero followers. And since they have made a combined 875 sales, it's surprising why they haven't made the company any money at all.
"Who knows if insiders are trying to pump it to a high price?" Peter Messineo, CYNK's last auditor, said. "All I know is that I disassociate from this. You issue a report on something and then they pump and dump."
Pump and dump scams, which involve fraudsters making exaggerated or misleading statements about the value of a company, are widespread in the penny stock market. When investors get hold of these statements, which are usually spread online in social networking sites such as Twitter and Facebook, they rush to buy stocks with "pumped" prices right before the fraudsters "dump" their stocks and stop hyping the company. Stock prices usually go on a downwards spiral from there.
CYNK has had four chief executives since it was founded by the first CEO, John Kueber in 2008. Kueber was replaced by Kenneth Carter in 2011, who said he resigned because the company's investors had a "different direction" in mind.
"How could it be worth it?" he said, when asked about CYNK's skyrocketing stocks.
Carter's seat was taken over by Marlon Luis Sanchez, a spokesperson for the medical tourism industry in Tijuana, Mexico and a partner at the Sanchez Medical Services in Southern California. Speaking over the phone to CNBC, Sanchez said he worked his magic for a year "and now you can see the results." He refused to elaborate on the details.
Javier Romero, a resident of Belize City, Belize, is now CYNK's chief executive. His business was listed with an office at Suite 400 at a business center in the city, but a staff for the business center said there was no Suite 400. The phone number listed on the website of IntroBiz led to a voicemail claiming to be the CYNK headquarters, but messages were not returned.
As of press time, CYNK closed at $14.70, giving it a market cap of over $4 billion. The lone company representative could not be reached.
