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As The SEC Finally Gets Involved In CYNK, One Short Has A Big Problem
It took the SEC only a week (after we first reported on it) to get involved with a company that does not exist, and whose stock rose nearly 30,000% in a few days, on a few thousand shares traded, hitting a nearly $6 billion market cap before it was finally halted for trading as we reported earlier. From the SEC:
However, even in its halt, CYNK ("don't be cynkal, be hopeful" perhaps Obama would say) continues to provide entertainment.
Case in point, this sad individual who on that bulletin board of epic retail investor comedy, Yahoo Finance, has explained their problem: it appears some brokers actually did allow shorting of CYNK, at a cost. A rather high and recurring cost it would appear.
Oops.
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You're fucked mate!
Have a nice life, living in poverty!
Yeah my advice is: Home Depot has a sale on nail guns.....
I'm glad I don't play stocks beside company 401K
I would have made my attempt to short it.
Shows what I know.
Long Au, Ag, Pb,
You play with fire, you get burned... Shorting a penny stock using margin is a fools game... Som Nam Na...
A fool and his money...
What money?
Someone else's money... Hope he can pay the vig...
The stock will be reported to have ZERO value. Yiou will get a 100% return on your money
Hows tat old saying go "the only way to win is not to play"
No more lies, no more lies
AD
If CYNK represents the market than that sucker on Yahoo perfectly represents why the day it crashes, the shorts will never see a penny.
Long Scottrade.
LOL ZH got honorable mention on bloomberg today for this!!!
Well done!
Looks like a damn good position to me. Who charges interest on a credit balance? When it repoens it'll be at .01 cent.
well, maybe not. and it could get worse. interest could be raised and if the broker can't locate stock to borrow, he may have to buy in. of course, with the stock halted, there can be no buy-in. meaning that the position could stay open with a god-knows-how-high borrowing cost. Imagine, the position carries on for a year or two and interest costs wipe out any profits - and those interest has to be paid instantly while the profits may show up much later.
Someone did sometghing he didn't know about properly - at least not when it comes to the risks involved. As they say, a sucker's born every minute.
YOU CAN NOT make money shorting this market EVEN when it crashes. Get out of paper if you can't afford to lose the casino money.
right. their customers are paying 12% ad infinitim....locked in.
Is that 12% annual, calculated daily and compounded monthly? If so, that's probably not too bad.
Can a person sue the SEC for locking them into a loss?
Call Yellon, tell her ya need a bail out ! ! !
Cover your short with a lawsuit seeking damages.
They chose Belize b/c Nigeria turned them down?
If this CYNK thing was either a money laundering scheme or some funding channel for some black ops equivalent stuff, then I suspect no authorities will ever be able to find any of the parties involved.
No one is allowed to beat the banksters at their own game. Any attempt to do so, legal or not, will be punished.
The shorts already have their money. They sold the shares at whatever they were selling for. Unless the SEC cancels his sale due to fraud, maybe.
Never thought I would plug S.A but here is a decent write up.
http://seekingalpha.com/article/2309115-cynk-technology-is-the-new-schem...
Good link and article....
I am very glad that the US Stockmarket meets its role of providing capital for smaller companies to grow by.............. LOL
don't forget hft's are there to provide liquiditeeee
I hate fucking nosey websights that force you to sign in before you can read it, especially through google+
sorry about that Tom. Forgot they make you do that.
To see the text:
Right click - Save Page As - HTML - open her up
Not true. division by 0 is not possible.
In this case our short seller will have a negative return
I'm guessing you've never shorted a stock before?
That's true. Better yet, if I recall right, no capital gains have to be paid on a issue that goes bust.
Are soon out partying!
Busting out the Thai. Nicely done.
On what planet can you short a stock and not have a margin account?
Scott Trade didn't even have shares to short. I call bullshit
I hope that the price of Au, Ag, Pt, and Pd DECLINES...as well as the price of Pb Bullets.
I do not know about you but I like buying something when it is on sale.
Only people who want to sell it are cheerleaders for Price Increases.
We have some good news and some bad news.
First the good news: Au, Ag, Pt, Pd and Pb have all declined substantially. The bad news is none of them are available for purchase.
This reminds one of the old Soviet Union. The good news is everything in the stores is very cheap and can be bought with worthless rubles. The bad news is there's nothing in the stores.
Sometimes some of these items might become available on the black market. If one includes the value of the incarceration and torture in the price paid for them, the price is not cheap. Police like to confiscate these items.
Thirty years ago, it was possible to buy gold items in the SU at bargain prices with US dollars. It the police caught you, you also got a free vacation in Siberia working in the gold mines.
My doctor has a similar joke he likes to tell appropo the above:
We have some good news and some bad news.
The good news is all of you are now covered by Obamacare health care insurance.
The bad news is that no doctors are now accepting Obamacare health insurance.
How about the doctor who phones one of his patients after reviewing his tests:
Doc: "The good news is: from the tests I concluded you have 24 hours to live."
Patient: "What? THAT'S THE GOOD NEWS? What's the bad news????!!!"
Doc: "I've been trying to get a hold of you since yesterday morning!"
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Why would go long on lead?
Lead already encased in copper jackets in the shape of bullets.
My advice is that you need to stop reading Yahoo Finance.
The next advice, which I offered yesterday on Zerohedge, is to NOT PARTICIPATE IN A FRAUD.
Principles before Profits
He deserves it.
One mans fraud is another mans profit.
I refuse to participate in any transaction where both parties do not win.
If I can provide my product for a price, if the purchaser can use my product, and if the purchaser is willing to pay the price, then we both win...regardless of how much I profit.
Imagine that...a fair trade...Something for something...Hey that is a novel concept. Hopefully it catches on.
With honesty, no less!!
Not only ARE a sucker and his money soon parted, they SHOULD be.
Fairness is for commies.
If you are fine with acquiring wealth through fraud, you must love our current system.
You don't need fraud to take money from suckers.
You're redundant. Your favorite zionist turd already proved that.
I hope that you are a DR of Finance not medicine. Mr Hippocratic oath'ster.
"Fairness is for commies"
People who conduct business with this mentality are why we honest folk are fed up. We work and toil HONESTLY, but apparently it's to fund FRAUDS like you who see no moral code in "Capitalism". I could screw over "fools" all day long in my practice. I could charge for things I don't currently and the "fools" would pay. This isn't fair, but according to your line of reasoning, if you're my patient... your money becomes mine just because I could? Snake oil salesmen are what we call people like you.
No thanks! I'll conduct myself with honor and dignity as a man's word will matter again someday. When that day arrives... people who think as you do will be placed where you belong... at the bottom of the trust barrel, as NOBODY who really knows you will trust you.
Dr. Vs Doctor.
Snake oil salesmen... wasn't that JD Rockefeller's old man?
Unfortunately, I think, fraud does pay.
If you sell someone a cow, and the cow dies because they don't know how to take care of it, is it your fault?
Yes, fraud is bad, but not all finance is fraudulent (beyond the fact that the dollar is a fraudulent instrument which poisons the rest of the system). If someone borrows shares for a short, they should know the failure methods of said short. That said, I would have thought that in this situation, the short would close out at a 100% profit, since the stock effectively no longer exists, even if it may or may not be revived at a future date. But I don't short stocks. Lesson hard learned at the start of QE1.
Wait a minute... value for value?
That's just crazy-talk.
Isn't value in the eye of the beholder?
How do you fairly value a stock?
Should a central committee set a price or range for every stock, instead of letting an auction market decide?
Geez TT.. clueless twat. Ride your high horse over to Yahoo.
Punishing criminals and bringing about the end of a fraud is a social good. Short sellers who are ethical can do this. The insiders at CYNK will go to jail. I don't see anything unfair about trying to punish thieves and get paid to do it, but perhaps the view from your ivory tower is clearer.
>> "Hey that is a novel concept. Hopefully it catches on."
I do believe it WAS a novel...and a long one at that.
LMAO
Someone missed a sheckle payment for this to happen
The SEC can deal with this scam
YET cant find the rigging & manipulation in the Gold & Silver market
LMAO
WE need govment insurance for exactly this kind of thing. Bail out the shorts that blow up. That way, stimulus all around.
Actually, so does Menard's. Bought one last week.
How much was the "in store rebate?"
Most annoying store I've ever had the displeasure of shopping. I only go there if it's the only decently priced option (not counting the rebates).
Why does he have to cover? He has the money, the shares go bust. Seems to me he keeps the money from the idiot he sold the shares to. Does he think the lender will demand the shares back if worth nothing?
Yep- his best move is to have the stock declared worthless, so his phony story proves he's even less clueless than he wants to appear.
I'm not aware of any retail investor being able to short this piece of shit- no one had any in inventory, no legit brokerage would have any shares to borrow.
I call BS- but still a funny story.
There are likely lots of Failure To Delivers outstanding. This can make the shares very difficult (or expensive) for the retail speculator to continue borrowing. The Backroom Boyz don't seem to care about FTDs.
Fuck Fuck Fuck! Is it too late to get in on this wunderkind and his company!?
The issue, of course, is that he no longer has the shares to return to the lender. No problem. Just return something of equal value back to the lender. I suggest a stick of butter.
Maybe the lenders don't want "something of equal value".
If the market price of gold went to zero and it so happened that you had some gold on deposit with your broker, would you be satisfied with "something of equal value" like a stick of butter or a cow pad?
Or what if you lost your gold in a robbery and your insurance company said it was worthless and refused to pay you anything on a claim because the last quoted price for gold was zero?
It should be a force majeur which cancels the short contract, in a fair world. What did Scotttrade do to earn this trader's recurring money?
They don't do much.
Brokers these days seem more interested in how to take all the client's money right away rather than concern themselves with the possibility of earning recurring money.
"It should be a force majeur which cancels the short contract, in a fair world."
What about the other side of the short contract that very likely is somebody thinking they just bought some share of the stock? The buyer in the trade doesn't know this is a short sale.
"We make money the new-fashioned way...we steal it."
Apologies and a h/t to John Houseman...
It probably goes without saying, but there's gold, and then there's shares of sink.
so, the FED just can stop the trading, right? Decider via Stopper of last resort on the over valued USA ? ...
This is the kind of thing that Jonathan Lebed does. Pump and dump using email blasts, newsletters and all that. Basically taking a penny stock and elevating it to the stratosphere then selling it leaving others holding the bag. He did this with another SYNC as well as BVSN.
Speaking of Ledbed what ever happened to George for Title? Did he ever get out of that hog lease in Tejas?
POLR - another pump 'em up and grab their cash
bloomberg radio was commentting on this yesterday and whomever was covering the story didn't have the ballz to flat out say it was a scam. Also, they kept mentioned, the the SEC was looking into the finance (ers) behind it, which was not clear... ZH way ahead on this one as usual-- ZH already looked into it and published an article on the same topic x several times x ...
Poor man just wen't full-retard..
Will the SEC buy my 1000 shares I bought at $15/share.
Any way to determine who is fucked? Who was caught with this fish taco in their portfolios?
''You're fucked mate!
''Have a nice life, living in poverty!''
You're a banker and haven't figured out that this guy hit a home run and doesn't even know it?
Very true, the brokerage where your account is controls the short, as they have to pay out the money...which you'll never see, even if CYNK goes to zero. If you're lucky, they'll drop the interest in about 6 months and you can have your money back. Otherwise, post-Corzine, your money is actually THEIR MONEY.
E-Trade Baby Loses Everything - a TV commercial we'd like to see:
http://www.youtube.com/watch?v=AYrpROr9Gmk
You're welcome.
CYNK=payoff. to someone somwhere
Throughout recorded history, a man's first instinct when caught w/ pants down is to quickly cover his shorts.
Savvy trader... The brokerage he cites doesn't charge 12% on margin. He either doesn't know, or he got a bad deal there too.
Goldman charges 100% (see ZH story here yesterday).
I think that was EX-Goldman.
Goldman thought he should be charging more...
Wouldn't he have a bigger issue if he was long on margin?
That's the funniest thing I've ever read. I also doubt if it's true. "Some brokers" allowing shorting? And a Scottrade retail account is one of those places?
Here, pull my finger.
Not sure about shorting at Scottrade. They wouldn't even allow me to calendar spread LEAPS - owning 10 contracts a year or more out, and selling 8 at next month expiration was considered "naked." What a joke.
Roger that (Wilco, not Riney). That guy sounds like another shill to me. It's not like Yahoo has any shortage of shills. Their job is to herd sheep so their bosses can clip some wool here and there.
I pulled it and that was one stinky fart.
Guessing,..I assume they margined, to buy shares, to sell short. Something like that. I've never tried it, for good reason.
Don't worry, The Fed's got your back.
The CYNK executives clearly didn't contribute enough to political campaigns.
Executive. Singular. There. Fixed it for you.
or more likely did not contribute to the correct campaign.
Never a moment too late for the SEC, and never a dull moment for Zero Hedge -- thanks to the clueless shorts that didn't see this halt coming.
scottrade does not permit shorting of pink sheet stocks...just more bullshit
I honestly thought that none of them did. Those things are pink for a reason.
rosneft is pink and it's partners are XOM and BP. is it pink because they've simply diluted red? rosneft has more oil in the ground than many canadian oil trades.
Bullish...right?
Going short these days ?
Stupid shorter.
Lowe's, Home Depot and Ace Hardware are Competing to sell their Nail Gun Inventory to his firm.
Shorting penny stocks on margin - retail brokers dream and retail investors guillotine.
It is not a penny stock and margin accounts are required to short. Is ZH now a bunch of SS retiree nutters that know ZERO about trading?
LOL- "It is not a penny stock"
That's so precious.....
Squeezem if you guttem (by the balls)!
Ahhh... Friday humour.
This is not fare. I wanted to get my buy order in and now I have to wait until 25 July to get some of this great 30,000% ROI stock. They are keeping it all to themselves.
Slaughterer was trying to short this yesterday. Said there were plenty of shares out there. I told him there are no options so I'm watching on the sidelines. I wonder if it was him?
if it is he should never admit it, just change his name to slaughtered.
How can you take anyone seriously with name like powllackski?
Of course all the insiders will get their cut of the pie while everyone else is left holding the bag right after the SEC and all fine CNYK 5 billion.
1 for you , 1 2 3 4 5 for me.
This halt is to figure out which insiders are holding the bag then and open the window momentarily to get out with profits or have their trades nullified not losing anything before everyone else gets shafted.
Probably the SEC is soliciting 'donations' from bagholders to get on the preferred list before they stick it to the less equal bag holders.
volume on the Dow as of right now - 9million..
real robust activity taking place in these FREE markets...
always stackin.
Let me be clear; Roll your motherfucking guillotine.
Does that help dumbass? Only one "rule" applies now; when fraud is the status quo, possession is the law.
Its like a very very long line of dominoes, they all stand up on end in a line suprisingly neatly .
At the moment some of the them are very shaky and wobbly and could topple at any time.
This will be known in future generations as the "stacking period" .
Shorting kills
My browser has yahoofinance blocked. It's just a bad habbit to read the contradictory bullshit and I don't need my subconcious fucked up.
I have some bad news for you brother. You're hanging out with us cretins. Your subconscious is already fucked up.
wow looks like scottrade broke all the rules, there is no short interest allowed for 30 days, (came public on june 16?) or options, and no margin on stocks under $5, which didnt happen until july 8. and there is probably a margin rule on pink sheet stocks. some CEOs complain about phantom shorts, look no farther this guy is one. but 12% isnt too much margin to pay to short a stock that has been halted by the SEC, when 5% is the norm. i know from experience these online brokers book the transaction first and borrow the stock later. short selling is a leftover from the old paper days. when they did away with stock certificates, market volume took off, but they still required short sellers to borrow shares, albiet the system didnt' translate well to the modern electronic age, much like a lot of rehypothecating. short selling is basically a side bet on the market between third parties, in this case the short and his broker.
They amended their articles of incorporation undergoing the name change from Infobuzz to its current incarnation, CYNK, so 30 days doesn't apply, and even then, MMs and other shareholders are free to loan out their shares as they see fit. You are thinking of the underwriters who obviously cannot short their own deals although I'm sure it happens.
Shorting bullies and pink sheets is entirely different than shorting F or IBM for example. The $5 rule does not apply in OTC Land. Get the borrow and you're good to go where retail trade is concerned. A lot of the shorting in this pig was done by MMs violating 15c2-11 (ALL MMs trading bullies violate c2-11) and they were in some serious pain until this halt. Somewhere yesterday, a trader was vomiting into his trash can and now sits atop a potential $500K pile of cash. This fool featured here is getting dinged by someone like Interactive Brokers or Speed Trader and possibly one of the bigger wire houses if they got borrows and that is REALLY hard to believe TD, Scott or Etrade got locates on this.
Yep, this ain't a retail investor deal, no retail broker would have let Ma or Pa short it- still a funny story tho.
a serious price decline is a given, making money off it not so much.
two principles of gambling, first you have to win the bet, then you have to get away with the money
When you short a stock don't you borrow it from someone --
Doesn't the guy doing the lending get paid?
I don't do shots - would rather buy a put on stuff I think is over valued -
What happens if I own a put and a company stops trading? Can I still exercise the put? How can I force someone to buy something from me that I can't even buy?
"don't you borrow it from someone"
In theory, yes, but not right away... the broker has some time to borrow it after the trade (t+3, don't remember) and if for any reason he can't your short will be called back.
these are the rules i think: the institution lending shares cannnot lend from a margin account. all short sales are done on margin, so margin rules apply. the lender can recall their shares at any time. they send out notices (call ins) which gives the broker time to find other shares to borrow. brokerages differ on the amount of margin they allow, 2:1 or 3:1. all short sales must be done on the uptick except of course for etfs. the short sellers account receives a credit on the stock sold short, if the stock never reopens, then the short seller keeps the money.
I think he misread the contract when he went short. The fine print on the bottom read "drop your shorts and bend over". Silly mistake. Now he needs to go long on KY.
heh heh, stupid shorts
um... I haven't actively shorted stocks in awhile, but I believe when you short sell, you borrow shares and sell them for someone. The money for the sale gets deposited in your account. Then you must at some point buy back the stock, hopefully at a lower price and replace it.
So... he should have extra money in his account from the sale... he'll be charged margin interest for the money needed as collateral for shorting more than his account could support to stay above the maintenance percentage.
But i'm pretty sure if it's delisted, the effective value of the stock is Zero, therefore he won't need to buy it back and he'll keep the money from the sale in his account and the margin should lapse.
However, he will continue to be charged interest until the issue of re-opening or de-listing is resolved.
Retail shorting ALWAYS involves margin.....
Stock probably won't be outright delisted but will re-open in a few days under $1
Dumb shit will be fine. Obviously has no idea how this works. Believe me I've shorted plenty of penny stocks in my day albeit as a bona fide market maker and the halt is EXACTLY what you want when you're getting the shit squeezed out of you by one of these low float turds. This thing will halt for a few days and depending on where he shorted and how much, this thing opens under $1 and he banks the fuck out of it. I would have given my left nut to be short just 1K of this at $15 or $20.
The ignorance here as to short selling is overwhelming. I would love to be short every share in existence. That would be a $4 billion winner.
The guys in trouble are the penny stock promoters.
Used to run a fund matching longs and shorts. the cost to borrow shorts went through the roof in the last 10 years. Literally insane. too bad there is no market in the SSFs This CYNK story though is a parable for the whole market. CYNK had to have scads of momo traders trading it who just kept buying while the price went up, no thought at all to the underlying equity. Now this is not all bad but the thing is there was no logic employed when it got just plain silly. If there had been the price could never got as high as it did, especially a day or two AFTER ZH already highlighted the issue. Frightening how ignorant a shockingly lerge number of our countrymen are. The short will be fine. He likely will never have to redeliver the shares. I am curious how long the guys who made the shares available will charge 12% for them when they essentially cease to exist.
it seems to me the higher cost to short also translates into higher options prices (puts) since the option seller must offload some of the risk. if a buyer wants a large block of put options the seller will go short to cover the position. the market is rigged to go higher, anything that allows sellers to get an even break is discouraged. i'm in a commodity etf at the moment which does not use futures, the SEC has a limit which prevents them from investing, so they went to Swaps. in that case they dont want to see the price of the commodity go higher on speculation. if it was a stock they would regulate from the other side, pumping the stock market is what government does.
LOL @"... the public interest and the protection of investors..."
You know, all I can do about this whole CYNK thing is just smile. Nothing else, but just smile.
The SEC folks are busy trading on insider information.
Looks like the Wolf of Scottrade got burned.
ROFL!
If you are in fact short this stock you should be happy. It goes to 0 and you are one smart dufuss. If you are long this stock on margin you just got the stuffing kicked out of you...and you deserve all that will happen to you.
see the article i referenced above. I don't think that applies in this case.
Well depending on whether it even opens again, it may just never appear again.
Bingo. that is exactly what I was alluding to up top.