The Pirate Stock Exchange in Somalia 🏴
The Pirate Stock Exchange in Somalia
Don’t trust the S&P 500? Avast ye! O’er in Somalia, thar be a pirate stock exchange! Anyone can fund a “maritime” company and share in the spoils of hostage and hijacking ransoms. Aye, aye!
The Somalian government is somewhat distracted at the moment by Islamist extremism, leaving locals in the town of Harardhere forgotten. To avoid a life of militancy, poverty, and stealing, Somalians join pirate gangs. It’s more commercial than you think. Ransom missions won’t pay for themselves, you know!
The town has opened its own bourse stock exchange where anyone can be a venture capitalist and invest in over 72 “maritime” companies. This drives the entire local economy. Here’s how it works.
Buccaneers and landlubbers sit in the crow’s nest, surveying trade routes for piracy prospects that could pay off. When they spot something, they go to the stock exchange for funding. Anyone can sponsor them with the barrels of kerosene, information, AK47s, and packed lunches they need, in exchange for shares in their venture. The pirates hoist the Jolly Roger and sail out to a container ship. They take some sailors hostage and are paid an average of $4 million out of Western shipping insurance to return them. Then everyone goes home. Rinse and repeat!
One lady funded an RPG-7 for a local group and received a $75,000 return, but it’s risky. Given the illiquidity, zero regulation and inevitable corruption, you could lose a lot more than your money. Investors in Harardhere will also struggle when the government eventually gets its act together. You can’t write piracy on your tax form, and you can’t leave a trail!
So, are these swashbuckling investors just shark-bait, or are they onto something with this quasi-crowdfunded, venture capital exchange? Wha’ do ye reckon?