Debt conversion allows brokers to short sell at the higher price, then they get the debt diluted shares cheap to cover the shorts. The float rises and the price falls.
-A company starts with 100,000,000 shares
-The company adds debt on the books (affiliate or some other association)
-Debt diluters give the CEO $100,000 (Paying off the fake debt) for 100,000,000 shares restricted
-Debt diluters show they paid debt and the benefit is the 100,000,000 become free trading.
-Debt diluters do that 20 times and end up with 2,000,000,000 free trading shares
-The CEO makes less and less for each 100,000,000 so the CEO may make only $1,000,000 at best.
-Debt diluters PUMP the crap out of the stock at $.15 per share (NASDAQ, $100,000,000 in sales) etc.
-Investors believe with only 100,000,000 in the float, once they are sold the price will rise.
-PROBLEM
-Brokers are NOT selling just 100,000,000, they are selling short 1,000,000,000 at the same $.15 but no one sees the increased float YET.
-Once the shorted shares are sold at $.15 and the brokers took in $150,000,000 CASH! they pay the debt investors $20,000,000.00
-The debt investors issue to the brokers the 1,000,000,000 shares to cover the shorts.
-Since the debt investors shares are NO LONGER owned by the company, ALL investors are doing is giving money to the brokers and private person NOT the company.
-The brokers cover the shorts, and the float increases to 1,000,000,000 or more.
-Brokers make $130,000,000 (Plus all the commissions)
-Debt investors make $19,000,000
-CEO makes $1,000,000
-CAN YOU GUESS WHO LOSES? ALL OF YOU!
:)