GGF said it would acquire the site’s domain names, sites and code (from the current owner, Seychelles-based Reservella) for SEK 60,000,000 ($7.8 million). Of this amount, SEK 30,000,000 would be paid in cash and the rest covered by newly issued shares. Additionally, file-sharing technology company Peerialism would also be acquired by GGF for a total of SEK 100 million, of which at least SEK 50 million is set to be in cash.

For the deal to go through the funding for the purchases has to be in place very soon and GGF shareholders need to approve the move at their Annual General Meeting. Now according to a report, there have been some changes in ownership structure at Global Gaming Factory.

On July 13th, GGF CEO and major shareholder Hans Pandeya received one million company shares which have been reportedly allocated “to a group of investors”. The information appeared on equity marketplace Aktietorget where GGF is listed.

GGF stock has certainly had its ups and downs during the past few weeks. Boosted 200% on the back of the initial news, by July 12th they had settled back to levels experienced before the announcement but since then have fallen further, recovering only marginally during the last couple of days.

But just when things were looking optimistic for GGF and their purchase, events today in a Dutch court painted a rather less optimistic outlook.

Notorious anti-piracy outfit BREIN is today sueing not only The Pirate Bay for copyright infringement, but in a shot from nowhere – have also named Global Gaming Factory in the lawsuit.

BREIN already summoned The Pirate Bay to court via Twitter at the end of June, but as soon as they heard the news that GGF would buy TPB, they added them to the lawsuit. Obviously Peter, TiAMO and Anakata don’t read Twitter, since they didn’t turn up to the hearing.

Casting doubt over the possible purchase, in court GGF lawyer Ricardo Dijkstra said that Global Gaming Factory that it is uncertain whether the sale will go through. The company would only buy The Pirate Bay if it can turn the site into a “legitimate business” and that, he said, depends on whether the assets they buy “can be used in a legal manner.”

Dijkstra said GGF was surprised it had been named in the case since it has shown a pro-copyright stance and has no say in how Old Pirate Bay is run, which will make a hell of a lot of sense to everyone except BREIN and their lawyers.

Confused? You won’t be! After next week’s episode of The Pirate Bay soap…

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

By paying both the copyright holders and file-sharers the company aims to satisfy both parties while cashing in on lucrative advertising deals.

Investors in the company responded positive to the news and the share price went up by 200% just hours after the plans were made public. GGF’s CEO appeared in every major news outlet, and although his plans were not very concrete, he predicted he could generate half a billion dollars in ad revenue per year.

However, after the media hype passed a lot of unanswered questions about the company’s exact business model remained unanswered. Possibly related, the shareholders lost faith as well and earlier this week the share price dropped below where it was before the Pirate Bay buy-out was announced.

At the Stockholm stock exchange GGF’s acquisition of The Pirate Bay raised some suspicions of insider trading. A week before the deal was made public the equity marketplace Aktietorget had shut down trading in GGF because the stock price was increasing rapidly without any solid explanation.

“There are reasons to suspect that information was leaked,” Peter Gönczi, executive vice president of Aktietorget said in a comment. This obviously didn’t do the image of the company or the value of its shares any good.

Whether or not GGF will be able to come up with a viable business model is still uncertain at this point. However, their first priority is to get the funding needed to make the acquisition, while convincing the shareholders that it’s a good deal.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

However, thus far GGF’s plans for the site and tracker are rather vague and uncertain. First of all there is a huge divide between what the Pirate Bay co-founders think will happen to the site and what GGF is telling the public.

TorrentFreak has spoken with Pirate Bay co-founders Peter Sunde and Fredrik Neij who both think that the Pirate Bay will stay pretty much like it is now for the time being. The only difference in the short term, according to their knowledge, is that the site will link to torrents hosted on a third party domain tracked by a third party tracker.

Both the torrent hosting service and the tracker they are referring to are still in development, the co-founders said. They are not aware of any concrete plans to turn the site into a legal venture. In an attempt to find out we asked GGF to elaborate on their future plans and the response we got was remarkable.

GFF told us that most of their recent comments to the press were nothing more than “corporate bla bla.”

So let’s take a look at some of the bla bla that surfaced in the past day, to see if it makes any sense at all. Here are some of the key proposals.

1. The new Pirate Bay will put a halt to illegal downloading.
2. The Pirate Bay will compensate rights holders who publish their content on the site
3. The Pirate Bay will pay users for sharing files.

This sounds very impressive but, to put it mildly, it raises a few concerns.

It’s basically the same as saying that iTunes would pay its users to share music. When GGF has to pay both file-sharers and content providers they will undoubtedly have to raise huge sums money from a third party. So what is going to bring in this cash?

Ads of course! GGF is predicting to sell ads like no other website in the world has ever done. They told BusinessWeek that they hope to make as much as $672 million a year from advertisements.

GGF is also planning to raise money from ISPs. Theoretically ISPs might be willing to contribute because they could save on bandwidth costs if most of the files are served locally or directly from caching services, but it wont be enough. Also, they assume that The Pirate Bay will generate a significant portion of Internet traffic once they go ‘legal’, which is doubtful.

An even more significant problem is keeping the current users on board and cutting deals with content providers, all at the same time. This is an almost impossible task since copyright holders will only join if there is no illegal content on the site, and users will only stay if there is enough free and unrestricted DRM-free content available.

This means that GGF has to cut deals with pretty much every large music and movie studio from the start to have even a chance of survival. Even if they manage that, they also have to collect millions of dollars to compensate both the users and copyright holders.

Nevertheless, only hours after they announced they would acquire The Pirate Bay, GGF claimed that the entertainment companies they’ve spoken to are already interested in teaming up with the site they fought long and hard in court. Perhaps the Big Four are more open-minded than we expected – maybe GGF will draw on the business relationship it built with Vivendi in 2007?

No further explanation is needed to see that the bright future GGF is selling will never happen. Their plans seem to be completely delusional, at least in this world, and it’s even a mystery where they will get the $7.8 million funding to actually buy the site. If they ever will….

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.

The acquisition for $7.8m (SEK 60 million) came as a huge shock to most people familiar with The Pirate Bay, as GGF promised that when it takes over the site it will eliminate illicit file-sharing – the base upon which The Pirate Bay achieved its worldwide fame and enabled it to gather millions of loyal users.

Indeed, most indications point to GGF being only interested in three things – the Pirate Bay’s domain name, the users and the revenue they can generate from them.

However, according to a report, the news of the acquisition didn’t come as a shock to everyone. Indeed, accusations are being made that some individuals knew what was about to happen and took the opportunity to try and cash in.

Around a week ago, equity marketplace Aktietorget shut down the trading of GGF stock after it spotted unusually large trading volumes leading to a rapidly increasing stock price, notably in the absence of any new information to explain the sudden interest in the company.

Indicating they suspect insider dealing and announcing an investigation, Peter Gönczi, executive vice president of Aktietorget told Dagens Industri: “There are reasons to suspect that information was leaked.”

After the price of GGF shares rocketed by more than 150% yesterday, at one point today they had lost 29% of their value, up to date details here.

Source: TorrentFreak, for the latest info on copyright, file-sharing and anonymous VPN services.