The more successful penny scams usually have some semblance of a business or product otherwise they can be debunked relatively quickly. But the smoke and mirror machine is used to great effect to leverage what is actually a fairly minimal or financially meaningless business operation into something that appears to be much more significant.
In many cases they start out as a legitimate business, albeit small....but then something happens...the CEO discovers it is much easier to sell shares than it is company product...and the death spiral begins.
Heck one of the all time most successful penny scams sponsored a NASCAR team....and ultimately took thousands for tens of millions.
The only people making money in the penny world are insiders, note holders and the odd trader that is smart enough to take profits and get out before the music stops, because when it does, there are never any chairs left.
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