The game Mad J. plays with MMEX-scam retail “investors” is perhaps fascinating to the uninformed (like the MMEX STRONG, Mad J.’s marks in the con).
Share-selling schemes based on toxic debt, like MMEX-scam are instructive. Starting with an biological analogy, these schemes have a host, or “victim,” in this case the retail “investor.”
Mad J., and his scheme, MMEX-scam are like the toxoplasmosis virus - inducing further cognitive impairment in infected victims, the retail “investor.” Once infected, the MMEX-scam retail “investor,” already impaired by a baseline set of deficits is further impaired by euphoric visions of “zip code changing,” “yachts,” “fabulous riches,” and “kaboomerage.” That euphoria and the MMEX-scam retail “investors” baseline deficit form a perfect host to supply Mad J. and his symbiotic loan shark pals a source of “nutrient” for the next phase, lather-rinse-repeat, of the con.
The loan shark, or toxic lender is going for a 1X or better return. For the uninformed, a 1X, or “single” is a 100% return of an investment on a cash-on-cash basis.
We can use Mad J.’s most recent toxic note, and current market activity as an example:
Mad J. took out his most recent note, gross of $110K, with a $4.5K upfront discount, and $5.5K in “fees,” netting $100K to Mad J. Ignoring the usurious interest rate, pre-payment penalties, and anti-dilution warrant coverage, the market-based ratchet is 40% of the 20-day low PPS.
If the lender converted the note today, at 0.015, that would generate 12.222-million new shares out of thin air (Mad J.’s pool of authorized shares), which the toxic note holder would then step out at a higher price, say 0.018 on average. The toxic note holder would net $220K, a 1X, or “single” return on a trivial investment - 100% of his money.
Of course it’s worse than this, because once the interest and anti-dilution warrant coverage comes in to the picture, the toxic lender gets closer to a 2X, or even sometimes a 3X - a “triple!” All this is off the backs of Mad J.’s marks, the retail “investor.”
What a fabulous business to be in (toxic lending)! Not so fabulous to be one of the marks, the MMEX STRONG.
Unfortunately, the MMEX STRONG have lost >90% of their investment a -1X strike-out.