Somali Pirates Are Getting Rich: A Look At The Profit Margins
Being a Somali pirate looks like a profitable business from the outside and it is. The margins are as attractive as those in the software industry. Microsoft still makes 60% or better margins on its core Windows, business, and server operations. With the risks that the pirates take, they ought to do as well as that. The New York Times did a piece last year in which it estimated that the pirates would bring in $50 million in 2008. That number will be higher this year, by as much as four times. ( See pictures of the brazen pirates of Somalia. ) Most information on hijacked ships is that the ransom paid to get them back is about $2 million per vessel and crew. In some cases, the pirates actually charge an additional fee for the ships which has been estimated as being as high as $5 million. Based on 24/7 Wall St.'s evaluation of news reports, the Somali pirates are seizing near one ship per day now. This week, on a single day, they took over four vessels. Even though several lar...