The cloud storage service created by fugitive millionaire is set to go public on New Zealand stock exchange
Kim Dotcom, the charismatic founder of file-sharing service Megaupload who is wanted by the US authorities for copyright infringement and money laundering, is set to celebrate as one of his latest ventures – the cloud storage platform Mega – gets listed on the New Zealand stock exchange.
Documents filed with the exchange show that the company is valued at NZ$210 million (£108.8m). Mega has chosen a fast track towards public ownership through a ‘reverse takeover’ deal with a local investment firm and is expected to begin trading shares as soon as June.
Dotcom stepped down as the director of Mega in September 2013, but his wife is thought to still hold a 26 percent stake in the company.
Federal authorities claim Dotcom illegally earned around $175 million through Megaupload, while causing losses of at least $500 million for the US entertainment industry. If extradited to the US and convicted, he faces a sentence of up to 20 years.
Megaupload was shut down in January 2012 on behalf of the US Department of Justice, as part of an international move against online copyright infringement. Dotcom and three of his employees were taken into custody by New Zealand police, but a month later released on bail, giving the entrepreneur an opportunity to launch a new service – Mega.
The updated cloud file sharing and storage platform offers its customers more control over their files. Just like before, users are able to upload, store and share photos, documents, music and video, but this time the service includes encryption, which Dotcom says makes it immune to any copyright liability.
According to the filing, Mega has around seven million registered users. It also plans to release encrypted chat, videoconferencing and email services in the near future.
Mega is able to go public thanks to a deal with TRS, using a small investment company already listed on the exchange as a vehicle. If everything goes according to plan, TRS will buy Mega, but issue shares to Mega’s existing shareholders, which will result in them holding 99 percent of TRS. TRS will then rename itself Mega.
“The rapid global growth of Mega has generated significant interest from potential investors. Listing on the New Zealand stock exchange will allow investors to participate in the ongoing growth of Mega,” commented CEO Stephen Hall.
Meanwhile, Dotcom continues to battle extradition, arguing with the judges about asset freezes, validity of evidence and the legality of search warrants. The next court hearing is scheduled for July. Hall told Reuters that Dotcom’s fate will not have an impact on the Mega listing, or the company’s operations in general.
At the moment, the entrepreneur is busy developing another project, the cloud-based music service Baboom. He is also trying to launch a career in politics and contest a general election in September as part of the recently established Internet Party.
Indicted. Raided. On Bail. All assets frozen without trial. But we don’t cry ourselves to sleep. We built #Mega from 0 into a $210m company.
— Kim Dotcom (@KimDotcom) March 24, 2014
Arrgh! How much do you know about online piracy? Take our quiz!