Back on February 21, I argued that shares of International Fight League (OTC: IFLI) were hopelessly overvalued at their price of $11.90 per share. Given that the stock closed at 19 cents on Monday, it looks like a lot of other investors felt the same way.

To be fair, it wasn't a tough call. International Fight League is an upstart in the mixed martial arts business, a very, very distant second to UFC. And yet its market cap, for a very brief period, eclipsed that of World Wrestling Entertainment (NYSE: WWE), a profitable household name.

So what happened? I have absolutely no idea. The company continues to put out press releases announcing deals like this one with HBO Latin America, but the company's chairman and CEO resigned abruptly last month.

It's certainly possible that shares of IFLI simply soared on the naive hopes of fans of the sport -- who then realized their error and dumped the shares all the way down to 19 cents. But the rapid rise and equally abrupt decline, unexplained by any apparent fundamental developments, smells of some kind of manipulation. But that's just speculation.

In any case, International Fight League exists as a cautionary tale: Don't pay absurd valuations for unprofitable new companies just because they're in exciting, fast-growth industries.

Mixed martial arts, also known as ultimate fighting, is probably the most dangerous sport on television. Enjoying a huge surge in popularity, it's wooing major networks with it's ability to target the 18-35 year old male demographic that can be so difficult to reach.International Fight League (OTCBB: IFLI), one of the premier organizations in the field, has seen its share price shoot up from the low-single digits in November all the way up to 17 dollars, before the recent pull-back to Tuesday's closing price of $11.90. While it may be as exciting to watch, it may also be as dangerous as stepping on the mixed-martial arts star Jens Pulver.

The IFL has been riding high with contracts with Fox Sports Net and MyNetworkTv. That's what the company does. It produces live events and television shows. The hype and excitement reminds of the ever-so-briefly high-flying World Poker Tour Enterprises, which produces poker shows for the Travel Channel. Take a look at this chart for WPTE (You may remember the bizarre disappearing bid for the company from poker legend Doyle Brunson):