Here is the deal, most penny stock investors hate anyone involved in debt equity financing. Those companies include the now defunct NIR Group, but also funding sources like Whalehaven Capital, Duchess Capital, and etc there are more companies that do this financing that I can't name right now.
Most small cap investors hate them because they are the main source of dilution because they have provided convertible debt/note funding to the company we invested in.
This is the business Matt is in and has been in, and the deal with Baron Capital is that by investing in Baron, you ideally will be now on the other side of that fence rather than hating any funding company like NIR, Whalehaven, or Duchess you are now hoping that Baron writes as many deals as possible.
It is unfortunate but these types of funding sources have been a necessary evil in the small cap markets for decades, and Congress inacted the legislation into the 1933 Securities and Exchange act allowing these types of funding sources to small caps through rule 504 of Regulation D.
People may hate Matt, but technically every deal he has written in the past he was a shareholder. His writing on a stock message board is no different than you or I writing on a message board in hopes that the stock goes up.
These funding vehicles Matt has been doing over the years, he is a shareholder in the company, but he provides larger amounts of capital at discounts to current market prices. It is all completely legal, and the higher any stock goes of course benefited him. Now that goes the same way, since Matt decided to roll some of his debt assets he already owns into a public company Baron Capital, the idea is to make those debt assets liquid, and more valuable than they were.
There is money that can be made here, but people need to understand what this really means. This is still a badly needed service in the small cap market, and one of the largest lenders of this type of financing has left a big hole in the market. NIR group and Corey Ribotski's perpetrated fraud and means there is now more business out there and available to Baron as well as for other companies to step in and reap bigger rewards.
Most of the other companies that I know of that provide PIPE financing to small caps are hedge funds, so the intriguing part is that Baron is the only one that I know of that is public.
There is definitely money to be made here, as long as Matt remains on the up and up. But everybody needs to understand one thing. Every time Matt serviced a convertible equity financing deal through a 504D type financing he was a share holder and it was always in his best interest for those stocks to rise so he could liquidate his position.
Now by investing in Baron the same thing is in our best interest. Creating value in the debt assets we own, so that our positions in those debts can be liquidated and new deals written. Continue this over and over, and continually remain liquid is what will make Baron money.
These prices are easy money as long as Baron's debt assets are liquid. If any of you have talked to Matt, you would know he only rolled a small portion of his debt assets into TOFS. He can roll more that he personally owns if he so chooses, to create more revenue and a larger preferred ownership for himself.
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