Pirates Start Stock Exchange

Believe it or not, engaging in piracy on the high seas can be pretty expensive. There are all sorts of costs to consider before those dreams of hijacked Greek oil tankers can even come close to fruition. There are weapons to buy, crews to hire and speedboats to procure – and given that Somalia is not exactly flush with cash at the moment (hence, the piracy), money for these ventures can be tough to come by.

And so the pirates are doing what any cash strapped business venture might do to offset startup costs: seek investors. Financial backers provide cash, weapons or other equipment. When the pirates successfully execute a raid, the investors get a cut of the loot. In some cases, these ventures can actually be quite lucrative; last month, pirates netted $3.3 million for the release of 36 hostages from a Spanish trawler.

This model has become so popular that a pirate stock exchange has recently formed in the Somalian city of Harardhere. No, we are not joking. Set up four months ago by former pirates, the exchange began with 15 “maritime companies” (A.K.A pirate gangs). Now, that number has swelled to 72. Provided one is able to make one’s way to Harardhere, anyone can buy shares in pirate ventures. The investments also work to endear the pirates to the local community, as a percentage of all revenues goes toward the building of schools, hospitals and other public infrastructure.

According to Reuters, speculation has pushed up ransom prices, from $2-3 million to $4 million as pirates try to maximize not only their own gain but that of their backers as well.

Pirates are already diversifying their portfolios less than a year into the exchange’s existence – according to Business Daily Africa, there are rumors that the booming real estate market in Kenya is being fueled in large part by piracy, made to appear legitimate through money laundering efforts in the United Arab Emirates.