Marx Cards

[dustin42]

Originally Posted by slogue2

Well that's what I meant. If they were doing funky accounting and recognizing revenue too early in the cycle, it's something that should be caught during DD leading up to an acquisition. But that isn't always the case. All you have to do is look at all the mega corps and accounting firms that went down once people started pulling on loose ends on balances and transactions that were too good to be true. Fun digression Accounting talk gets me too excited even when dealing with it all day at work.

Me too Also Steve Cohen runs PSA like the Mets. Completely bat spit crazy.

[Yanks23]

Originally Posted by jewcer2k5

I can tell you that I’ve never had a line of credit extended to me. I also never asked for one. There were times where they crushed our card so much in 1 day the next day we had it declined. We paid our CC off, they ran it again then shipped the cards. We’ve never had cards shipped to us that weren’t completely paid for.

Gotcha well that is good to know. PSA really messed up by not knowing how much they really did extend credit to customers with open orders. I guess this is the 1st really big customer they got screwed by or maybe it was bigger issue since they were handling so many customers cards. I wonder how many other people have not paid for orders on junk that is not worth grading fees - just cancel credit card.

[dustin42]

Originally Posted by Yanks23

Gotcha well that is good to know. PSA really messed up by not knowing how much they really did extend credit to customers with open orders. I guess this is the 1st really big customer they got screwed by or maybe it was bigger issue since they were handling so many customers cards. I wonder how many other people have not paid for orders on junk that is not worth grading fees - just cancel credit card.

The leadership that let this happen are gone and/or sold their stake in the company. Think about that.

[auburn35]

Had some free time and finished browsing the bankruptcy filing.

Didn't see anything more about who Marx was trying to pass the failing business onto but here's a few more interesting notes.

4.5~ million revenue in 2021 and they ended up in bankruptcy.


Surprisingly small inventory, for a card shop and the one collectable asset is a Sam Darnold, Jets helmet.




Marx's values their customers list (names, emails...) at $50,000....yikes. I counted 891 names, identified with third party grading claims. That's a bunch of angry customers on that list.



If anyone is curious, it appears that sports card radio has posted a copy on their site.
https://www.sportscardradio.com/wp-c...96__0001.0.pdf

[Y2Hood]

Having gone through personal bankruptcy nearly 10 years ago, he's going to have to do better than that with the inventory. This is federal court and you're a business. Just for personal they wanted to know pretty much everything in my home including TV, kitchen utensils & appliances, furniture, ANYTHING that could hold value. Nothing wound up being confiscated as "Garage sale value" (my attorney's words) on stainless steel forks, 5 year old TVs, etc... was pointless for the court to pursue. I even inventoried all of my cards after failing to liquidate a lot of them for cash, mentioned in the filing, and since my collection was mostly modern they didn't want to bother with fooling with that.

BUT I wasn't filing as a primarily sports memorabilia business, either. I was just Joe Blow citizen that had a deluge of medical bills in a very short time that also hit at the same time as spousal job loss. Marx cards better do better with the inventory. US Bankruptcy court is generally run by understanding people that "poop happens" to unfortunate schlubs but when they smell a scheme they will eat you alive. It was very educational to sit in that room and watch the "judge" (per my lawyer he was a step under "judge") switch from understanding and endearing to the people with no medical insurance that just had a run of bad luck to beast mode on the person that went take out 5 pay day loans a week before filing, essentially, "you knew you were going to be filing bankruptcy and you pulled THIS?"

Also in my 3 hours sitting in the federal court, only one case had a creditor show up to call shenanigans on the couple that was filing and it was their landlord moaning about the couple making a combined $200k and she doesn't understand why they can't pay her the back rent they owe her. And the "judge" went off on the landlord, "This is the United States of America and we no longer have debtor prisons. These people are $800,000 in debt because of a failed business and lost everything and you're going to come in here and bug them about one month of missed rent!?"

Marx better have their ducks in a row. They do not have a "I'm sorry you had this bad luck" case. They definitely have a case that should have Dr. House in the room yelling, "YOU IDIOT!"

[KhalDrogo]

Marx is a POS and total amateur hour. And if you didn’t believe that before, this filing should prove it. Someone else said it already, but this hobby/business is full of dummies. That’s the best arbitrage opportunity, because you can easily be the smartest person in the room without much effort.

[hauntedcomputer]

Wonder if some of that "store inventory" got slipped out the back door and into some accomplice's basement. Because that level of inventory isn't even worth a table at a local show, much less a store/business.

Also hilarious that he got two-thirds of his grading sub fees upfront but now blames PSA for not sending cards back as if that was the reason for cash flow problems.

Yeah this is going to be some great drama for a year or two.

[Sonnys88]

Originally Posted by hauntedcomputer

Wonder if some of that "store inventory" got slipped out the back door and into some accomplice's basement. Because that level of inventory isn't even worth a table at a local show, much less a store/business.

Also hilarious that he got two-thirds of his grading sub fees upfront but now blames PSA for not sending cards back as if that was the reason for cash flow problems.

Yeah this is going to be some great drama for a year or two.

The whole filing is pretty comical and will no doubt be picked apart by the Judge / IRS / Government.

None of the financials make sense - how did they have a revenue of over $4,000,000 for 2021, not pay for their PSA orders (basically got free money from the submitters), and show a current inventory only in the 10s of thousands - and then have each bank account at zero or in the negative?

Reconciling where all that money went will be interesting...

And of note, it doesn't appear that CC2 is listed as being owed anything from Marx. In CC2's video I thought he mentioned a promissory note or something like that being made between him and Marx.

[Sonnys88]

Duplicate post

[jewcer2k5]

Originally Posted by auburn35

Had some free time and finished browsing the bankruptcy filing.

Didn't see anything more about who Marx was trying to pass the failing business onto but here's a few more interesting notes.

4.5~ million revenue in 2021 and they ended up in bankruptcy.


Surprisingly small inventory, for a card shop and the one collectable asset is a Sam Darnold, Jets helmet.




Marx's values their customers list (names, emails...) at $50,000....yikes. I counted 891 names, identified with third party grading claims. That's a bunch of angry customers on that list.



If anyone is curious, it appears that sports card radio has posted a copy on their site.
https://www.sportscardradio.com/wp-c...96__0001.0.pdf

Customer list worth $50,000....That's amazing.

[KhalDrogo]

Does the revenue they report here include the PSA submission fees they were taking in?

[discodanman45]

Marx Cards trade secrets for $500. Sign me up for that! Can I also get their website domain with that purchase? Could have fun with that.

[theleica]

I don't know anything about how bankruptcy works so excuse my ignorant question:

Can the judge / IRS / Government take these PSA cards as assets of the company?

[discodanman45]

Originally Posted by theleica

I don't know anything about how bankruptcy works so excuse my ignorant question:

Can the judge / IRS / Government take these PSA cards as assets of the company?

No. These cards are not property of Marx Cards.

[auburn35]

Originally Posted by Sonnys88

The whole filing is pretty comical and will no doubt be picked apart by the Judge / IRS / Government.

None of the financials make sense - how did they have a revenue of over $4,000,000 for 2021, not pay for their PSA orders (basically got free money from the submitters), and show a current inventory only in the 10s of thousands - and then have each bank account at zero or in the negative?

Reconciling where all that money went will be interesting...

And of note, it doesn't appear that CC2 is listed as being owed anything from Marx. In CC2's video I thought he mentioned a promissory note or something like that being made between him and Marx.

Not surprisingly based on the apparent shoddy record keeping, it appears Marx has CC2 listed as both Ryan Johnson (I believe is correct) and Ryan Thompson. Are there two Ryan's?

Ryan Johnson
3455 Grove City Road
Grove City, OH 43123
Basis for the claim: 2021 For Third Party Memorabilia Grading
$3,108.00

Ryan Thompson
dba 614 SportsCard LLC
3455 Grove City Road
Grove City, OH 43123
Basis for the claim: Promissory Note
$115,697.47

[discodanman45]

So, something really strange here. CC2 old store was called Marks Sports Cards Plus! Marks cards, Marx cards!

https://www.facebook.com/MarksSportsCardsPlus/

[jewcer2k5]

Originally Posted by auburn35

Not surprisingly based on the apparent shoddy record keeping, it appears Marx has CC2 listed as both Ryan Johnson (I believe is correct) and Ryan Thompson. Are there two Ryan's?

Ryan Johnson
3455 Grove City Road
Grove City, OH 43123
Basis for the claim: 2021 For Third Party Memorabilia Grading
$3,108.00

Ryan Thompson
dba 614 SportsCard LLC
3455 Grove City Road
Grove City, OH 43123
Basis for the claim: Promissory Note
$115,697.47

If CC2 paid PSA for that it will just be taken off whatever amount Marx owes PSA. They aren't going to be able to collect the money again. They just think they can collect the same dollar over and over and over again. Its mind boggling how inept they are.

[Grid]

Originally Posted by jewcer2k5

Also funny - $50k stolen by bookkeeper and looking for $100k in return.

For the bookkeeper, it was over-payment and embezzling.

I could see the $100K sought two ways.

The bookkeeper over paid themselves $50,000. That money was not agreed to, and should be returned.

The other $50,000 is either the annual $48K salary being returned as welled, for failure to actually do their job they were hired to do. IE, I paid you to be my accountant, and you failed by listing false account data, which lead to my hardship.

Or, and this is more likely, is the embezzlement side. Perhaps those false entries lead to even more money being taken by her. She not only overpaid her own salary, but she was stealing money from the company as well. Maybe to the tune of $52,000. And the $100K sought.

[RufussCkingston]

Originally Posted by KhalDrogo

Does the revenue they report here include the PSA submission fees they were taking in?

It has too, you think they sold 4.5 million in cards at the store?? Without looking at the filing, when you file business bankruptcy, do you have to file where all the revenue that came in was spent?

Also find it funny how they claim they have a claim against PSA for shutting down for 6 months. They NEVER shutdown, they just stopped accepting new cheap orders. Unless it is in the dealer agreement that dealers will ALWAYS be able to submit to PSA at all price levels, I don't see the grounds for the claim.

[jewcer2k5]

Originally Posted by KhalDrogo

Does the revenue they report here include the PSA submission fees they were taking in?

Im curious to see if they have to detail payroll. Thats a lot of payroll for a relatively small operation.

[Grid]

Originally Posted by auburn35

Had some free time and finished browsing the bankruptcy filing.

Didn't see anything more about who Marx was trying to pass the failing business onto but here's a few more interesting notes.

4.5~ million revenue in 2021 and they ended up in bankruptcy.

Revenue is the entire income a company generates from its core operations before any expenses are subtracted from the calculation.

$4.5MIL was not their Net Income. It was money taken in, before expenses.

You can take in $4.5MIL in revenue, and spend $4.6MIL to do that, and yeah, you lost money.

I can see why their numbers are so high. Just using made up math, if they took in 175,000 cards, at $25 per card. That is $4,375,000.00 in revenue. They paid PSA $22 per card. They had a profit of $525,000. After expenses, like paying staff to sort and ship both ways and what not. That might be $500,000 per year.

With a net profit of just $25,000

Not defending their numbers, but a lot of failing business look like that. It took Amazon 9 years to turn a profit. It took Tesla 10 years to do so as well. It can be common in many start ups

[RufussCkingston]

Originally Posted by jewcer2k5

Im curious to see if they have to detail payroll. Thats a lot of payroll for a relatively small operation.

The owners probably paid themselves a very high salary. I read somewhere that the owners threw $150k back at the problem towards the end to 'keep it going". Probably came from the inflated salary.

[KhalDrogo]

I wasn’t sure if Marx did group breaks or what their other business involved. The PSA grading fee revenue they were taking in should have been accounted for as deferred revenue. It’s a liability. Not only is it not realized, it’s never going to be realized.

An example of deferred revenue is Apple Care costs. Apple is on the hook for repairs and replacements until the terms expire. It could be a net loss for Apple. They have to wait to see. On the other hand, it doesn’t matter when Marx collects the PSA fees from their customers, 100% of that money is always for PSA. Their revenue is the amount they charge in excess of their PSA fee in order to facilitate the transaction.

The reason I ask is that if Marx had loans or other lines of credit, they may have been using these sketchy at best revenues in order to obtain them.

[RufussCkingston]

Originally Posted by KhalDrogo

I wasn’t sure if Marx did group breaks or what their other business involved. The PSA grading fee revenue they were taking in should have been accounted for as deferred revenue. It’s a liability. Not only is it not realized, it’s never going to be realized.

It's possible they considered it as revenue, but then had a corresponding accounts payable/deferred revenue entry for the cost they pay PSA to offset it.

Jewcer would probably be able to exactly answer this question/assumption.

[jewcer2k5]

Originally Posted by KhalDrogo

I wasn’t sure if Marx did group breaks or what their other business involved. The PSA grading fee revenue they were taking in should have been accounted for as deferred revenue. It’s a liability. Not only is it not realized, it’s never going to be realized.

An example of deferred revenue is Apple Care costs. Apple is on the hook for repairs and replacements until the terms expire. It could be a net loss for Apple. They have to wait to see. On the other hand, it doesn’t matter when Marx collects the PSA fees from their customers, 100% of that money is always for PSA. Their revenue is the amount they charge in excess of their PSA fee in order to facilitate the transaction.

The reason I ask is that if Marx had loans or other lines of credit, they may have been using these sketchy at best revenues in order to obtain them.

Originally Posted by RufussCkingston

It's possible they considered it as revenue, but then had a corresponding accounts payable/deferred revenue entry for the cost they pay PSA to offset it.

Jewcer would probably be able to exactly answer this question/assumption.

We pay our accountant to deal with this the right way. We are also in a different situation because we never take money up front. In theory we take pay the expense of the submission to PSA, take revenue in from customers and the difference is our gross profit.