Thriving on terror!

Smoke emitting from the dome of Taj Mahal Hotel, this is an image that would be permanently tattooed on our minds alongside the image of an Airplane crashing into WTC towers.

It is a new face of terror that the world is not yet equipped to handle. Not new because of its guerrilla nature, Kashmiris are facing such wrath for years now. Not new because terrorists are equipped with GPS, SatPhones, Blackberry and AK 56; new because it is a thriving industry now.

I was discussing with one of my colleagues where does all the funding come from, for such meticulously planned and executed projects (projects, that we call acts of terror). Apart from the funds required to amass the ammo and the gadgets, there are other expenditures as well- training, bribing, salaries of trainers, salaries of project managers, salaries of workers.

One explanation could be, this expenditure is actually an investment, with a promise of strong ROI. To clarify the point further here are some facts, post 9/11, United Airlines’ shares experienced a price drop of 43% while American Airlines’ parent company, AMR, registered a stock price drop of 39%. This translates into ~200% profit in a single day for someone putting a short on United Airlines shares, hmm!

Indian Hotels, the group that owns Taj Mahal Hotel suffered 17% fall in its stock prices post 11/26, which translates into 83% profit in a single day for someone putting a short on 11/25. Similar was the case with other stocks associated with travel and tourism.

Interestingly JW Marriot has been targeted twice by terrorists, once in year 2003 in Indonesia and then in year 2008 in Pakistan.

If terrorism is indeed pursued as an economic activity and if our security agencies fail to overpower this new business empire, we may see de-listing of currently publicly listed companies inorder to safeguard themselves from the threat of terror attacks, translating into collapse of economies.