Being Bad At Math Should Disqualify You From Building, Funding, Or Investing In A $3.8B Project A couple dozen regular people in an Atlanta investing club wired about $20,000 into a penny stock developer I've written about twice, and got nothing back. No shares, no refund. One of them, Terrence Ruffin, put in $5,000. In March he filed complaints with the FBI, the SEC, FINRA, and the police, alleging a ponzi scheme. The consultant who raised the money calls it a "nothing burger." Both times I wrote about Forge Atlanta, the call was the same. Promoters collect fees, retail takes the loss. The real question is how grown adults got here. So I went and read the pitch. The investment page is still live, and the headline promises a "121% Internal Rate of Return." Drop to the table below it and the IRR is listed at 14.31%. The 121% is return on investment, not IRR, and they ran it in the marquee anyway. Across the 20 years they're projecting, that 121% total compounds to about 4% a year. The 14.31% and the 2.82x equity multiple in that same table don't even agree. A 2.82x over 20 years is a 5% return. None of this is sophisticated. It's grade-school arithmetic, and they botched it. A developer who can't foot a pro forma has no business building a city block, and the people funding him and lending against him have no business there either. Take their honest numbers at face value and this is a 20-year, three-phase, ground-up build with construction and lease-up risk, projected to pay 4 to 5% a year. Treasuries pay you that to sit still. And every number I just walked through is a project return. The club didn't buy the project. They bought 7-cent common stock in the parent company, sold at a discount before a public offering that never had a reason to happen. They sit under the construction debt, under a seller note already in default, under the 20% of the deal somebody else owns, under every new share the company can print. The 4 to 5% is the ceiling for the whole project. Whatever reaches a penny-stock holder of a company with $1,200 in the bank and $41 million in liabilities is a fraction of a fraction. When they asked whether their money was sitting in escrow, the answer was no. It was for expenses. One thing they were never told: the developer doesn't own the land. It's seller-financed and already in default. One member said that hearing the words "seller financing" would have ended the meeting on the spot. He never heard them. He didn't need to. The number that should have ended the deal was on the homepage in plain sight, wrong, and free to anyone who could multiply. Avoiding something like this takes no brilliance, only a calculator and the discipline to use it before you believe the brochure. https://lnkd.in/eTyXGPeS