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All the Warning Lights are Flashing
The view from the outhouse.
STOCKHOLM (Rixstep) -- 'Global Gaming Factory tried to use the announcement of the acquisition of The Pirate Bay as a back door to a stock exchange', wrote E24 correspondent Torbjörn Isacson at the end of June. 'But instead it turned out to be the backdoor to an outhouse.'
SvD dig deeper into the affair.
Pump and dump. Try to hype a stock and then sell it: a classic scam in the back yard of the stock exchange. Almost everything about Hans Pandeya and Global Gaming Factory reeks fakery.
Buy a shell company on a small exchange with negligible controls. Fill it up with a fluffy vision that exudes technology and the future. Spew out lots of press releases on the same theme. Watch the stock price go ballistic. Sell your stock. This is how it's worked in many notorious stock swindles. Xcelera by the Vik brothers in the US is one example. NRS Technologies kissed the sky at Aktietorget and then fell flat as a pancake. Majority stockholder Alexander Richards is indicted for racketeering.
Alexander Richards owned three corporations on Aktietorget. One of them - Addyourlogo - was acquired by Hans Pandeya and his business partners at Global Gaming Factory in 2006.
The company's had only modest revenues. 5.3 million for 2008 and only 869,000 for Q1. About 1 million in cash. To keep the company afloat they've had to borrow from investors and sell a subsidiary. Communications with fluffy predictions such as 'management assess the corporation's prospects as excellent' and 'management are planning new acquisitions and negotiation are underway'.
Global Gaming Factory's auditors submitted two 'dirty' audit reports in a row - a clear warning signal.
The auditors have also been forced to go to the Crown Bailiff Authority to get paid - just like the previous auditors. The yearly report wasn't submitted on time. The quarterly reports were substandard. And so forth.
And then we have the purchase of The Pirate Bay, followed by a flood of press releases.
Amongst other things about John Fanning, one of the founders of Napster, placing an informal bid on The Pirate Bay - a claim known today to be a bluff. The same press release mentions another informal bid for SEK 120 million from a Russian corporation. One can only speculate if there's more substance behind that claim.
A few days later comes a story out of nowhere that stock in The Pirate Bay might be traded in the US - no further details provided.
It's hard to see anything but an attempt to push up the stock price.
The statements about Peerialism also seem to be taken out of thin air.
It's clear that the trustworthiness in all information coming from GGF can be seriously questioned.
The GGF stock price began to go up already a week before the announcement of the purchase of The Pirate Bay - something that led to the current insider trading investigation.
The effect Hans Pandeya expected on the stock price is there in the original press release about the purchase. That release says that half the 30 million would be paid with new emissions of GGF stock - but only if it represented at most 3% of all stock in the company - for an evaluation of GGF at 1 billion.
An absurd figure.
But the stock rally never happened. At time of writing the stock value is barely 60 million. A high figure for a company with no assets.
And who's going to supply the other 60 million to finance the purchase of TPB remains unclear. Hans Pandeya claims he'll help finance the deal if needed. All the while he's being chased for debts.
It's also unclear how the company plans to make money. As well as other not entirely irrelevant details.
Business partners such as board members Peter Sellström and Johan Staël von Holstein have distanced themselves from GGF and Hans Pandeya as Aktietorget now have done.
So instead of an acquisition of The Pirate Bay today we have a criminal investigation.
SvD: 'Alla varningsklockor ringer'