Friday, July 11, 2014

Pet Rocks are Back in Style

Pet Rocks Are Back in Style
by Amasing

Actually they are not in style but you’ll get the idea why I started this article with “Pet Rocks.”

Some people claim that this “Pet Rock” craze was just a scam but in actuality, it was not.  There was no false advertisement in the marketing of this product and people knew exactly what they were buying.  Now, the promise of some imaginary betterment of your life could have been exaggerated but what advertisement doesn’t do that?  This all leads to the very important issue of what makes capitalism, well, capitalism…stocks!

I have not worked on Wall Street and I’m not a financial advisor but I do have a nose for the obvious (which we all should).  Who has ever heard of penny stocks?

Penny stocks are low-priced, small-cap stocks that basically the SEC (Securities and Exchange Commission) view as any stock under $5.  Why an article on Penny Stocks? I’m confused about how a company called “CYNK Technology” whose value was $0.10 (10 cents) and today, is worth $4 billion.  The company generates NO revenue and has virtually NO assets.  Even if they went bankrupt, you couldn't liquidate anything! 

CYNK Technology is based in Belize and only has one recorded employee that runs a social networking site called IntroBiz. That site says it allows users to "both buy and sell the ability to socially connect to individuals such as celebrities, business owners, and talented IT professionals," but it is not clear how many registered users it has.  My nose smells scam as in money laundering.

Well, this might not cause the next bubble or force another bailout but something that was worth $0.10 a share to a billion dollar investment today perplexes even investment watchers like MSN Money which titled it: “Mysterious penny stock soars, and no one knows why.” 

Let’s do the math, if I had $20, I could have bought 200 shares.  At its peak, the stock was worth $20 a share.  I just made $4000 on a $20 investment.  If only I even have $20 to my name.

No comments:

Post a Comment

"Be as smart as you can, but remember that it is always better to be wise than to be smart."

Related Posts Plugin for WordPress, Blogger...