Global Gaming Factory X

» see globalgamingfactory.com as it lived, on the wayback machine

~ the goodbye ~

Sweden spent 2009 prosecuting the Pirate Bay, and on a Turkish broadband line you followed that case with an interest that was not purely academic. I was on TTNet at home by then. Halfway through the summer came news that the site had been sold to a listed Swedish company nobody had heard of, and the argument changed overnight from whether the founders would go to prison to whether the thing itself was about to become a subscription service.

The buyer was Global Gaming Factory X AB of Stockholm, an advertising and software company whose actual business was internet cafes. It worked through the installed base of Smartlaunch and CyberCafePro, the cafe-management software running on the machines in internet cafes and gaming centers around the world, using it to distribute advertising and software to the people sitting at them. Its registered objects clause with the Swedish companies office described online gaming and internet cafe operations, and its industry code, oddly, was scientific and technical research and development.

On 30 June 2009 it announced its intention to buy The Pirate Bay, along with shares in the Swedish P2P company Peerialism AB, with the transaction planned for that August. The announced price was 60 million Swedish kronor. Shareholders approved on 27 August. The money was to come from around 40 people, according to the chief executive Hans Pandeya, and a 2 million kronor loan had arrived, to be repaid by issuing up to 20 million shares.

None of it happened. The site was never sold, and the register entry for the company tells the rest in four fields: liquidation decided 18 January 2012, deregistered for corporate tax with the reason given as bankruptcy, status inactive, bankruptcy concluded 21 August 2013.

~ the chronicle ~

~ the sixty million kronor ~

The accounts filed for the company were public the whole time and almost nobody read them. For the year ending December 2009, Global Gaming Factory X had six employees and a turnover of 8.9 million kronor. Its loss after net financial items was 17.9 million. The year before that it had six employees and 5.3 million in turnover. In 2007 it had ten employees and a loss of 7.4 million on the same measure.

So the firm proposing to pay 60 million kronor for the most contested website in the world was turning over about a seventh of that figure annually and had never made a profit in the three years on record. Even before the announcement, trading in its stock had been suspended because of abnormal volumes, which brought suspicions of insider dealing.

AktieTorget delisted the shares on 9 September 2009, partly because the company had not told its stockholders how it intended to fund the acquisition. After that the shares traded unofficially on the Mangoldlistan. Johan Sellström, a former chief technology officer, was pursuing the company through bankruptcy proceedings that autumn over a debt of about 1.4 million kronor owed to his firm Advatar Systems.

~ bust, twice ~

What makes the second act worth recording is that the plan did not change after it failed. In October 2010, fifteen months on from the collapse of the Pirate Bay deal, the company opened a rights issue at 20 öre a share on a pre-money valuation of 62 million kronor, and the stated use of the proceeds was to buy file-sharing sites and convert them into legal services. Ten percent of the purchase price was to come from the issue and ninety percent from foreign investors. The subscription period had to be extended twice and closed on 8 December 2010.

That same month two creditors, Kennicott AB and Hercora Trading Technology, went to court demanding the company be placed in bankruptcy immediately over loans made in August 2008 totaling about 1.5 million kronor. It had filed no financial reports for 2009. TorrentFreak, covering the petition, noted that Pandeya had approached Demonoid with a buyout offer that August and been turned down, and had made an offer to another prominent torrent site two weeks before the article ran, also rejected. The register's final answer came on 21 August 2013, three years after the last offer and four after the famous one.

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