The high-tech industry seems to have an unbelievable rapid rise in interest, and then reconciled as early as the late 90s spectacularly.In20 business, with economic bubbles, saw billions of dollars of venture capital poured into technology companies (main dot-com) in a craziness lock up to the next major event. Many start-ups are public, and even more investment money. Pay more attention to hype than to solid business plans. The stock market has soared to an incredible (inflated) height, with everyone involved and the prospect of becoming a millionaire. In some cases, early investors cashed in and made some sweet coins.
But in March 2000, when the high-tech bubble burst, those who did not get enough early left behind, but their dreams were shattered. Many bust companies follow a rule: through venture capital and initial public offering, fledgling enterprises receive hundreds of millions of cash reserves that have been blown out through the most rampant spending and rapid expansion. When the income does not reach the expected level, they fail to obtain additional funds because of market conditions and launch bankruptcy in a short year or two.
Here are 10 high-tech financial storm stories. Most of the net bubble that has been cut down is directly or indirectly, though there are some unwise acquisitions, lawsuits or malicious acts. We can credit these early entrepreneurs for laying the foundation for our modern cable 24 / 7 life, and also provide some valuable lessons on how not to run a high-tech company, but think it may be a little consolation to those who wake up the disaster.
Learning company is an educational software company that has created such popular games as' Mystery Island ',' reader rabbit 'and' where in the world is Carmen San Diego? 'toy company Mattel's $360 million purchase of learning company's infamous life in May 1999, one of the most disastrous acquisitions of all time. Mattel bought and wanted to strengthen its software products, but within months of sales, the company learned, which in a few years did not develop a new hit, lost nearly $200 million. This turned Mattel's expected earnings into a loss of $86 million in. The company's shares, which have reached a high of about $46 A share, have plummeted to about $12 a share since last year.
Gil middot Ballard, Mattel's chairman and chief executive, was forced to resign in a fiasco. Ballard had her way from product manager at Barbie division, where she greatly increased sales. Mattel sales learned that Gore technology group was considered to be about one tenth of its purchase price in 2000. Grace learning's entertainment division spun off Ubisoft entertainment, education and sales of revaldi, which later acquired Houghton Mifflin. The learning company is now a division of Holden Mifflin Hackett.
Webvan, launched in June 1999, lets customers order groceries online and send them home. This is a popular view, but its Internet low saturation time of the day is likely to advance Webvan raised about $8 million in venture capital and $3.75 million in its November 1999 IPO. It traded for the first day at $34 Webvan's business began in San Francisco and expanded to eight other city markets. It doesn't just pick up and provide daily supplies, but stores all of its own merchandise - it has problems with the traditional grocery chain's delivery service. It also requires a large number of staff, each warehouse costs a lot of cutting-edge automation and servers to process orders Instead of going for slow growth, Webvan invested 100 million yuan to expand its state-of-the-art warehouse to 26 cities in 2001.
Like many other dot com companies, the fall of stock prices is the victim of serious overspending and hasty expansion Before the end of Webvan, markets in Dallas and Atlanta were closed to reduce costs. As in some areas, cutting the quality of agricultural products has also made some rookie mistakes, in order to save money and upset customers. The company has 750000 customers in its remaining market, but cannot attract enough new business to break even Webvan's share price eventually fell 6 cents - about 2000 workers were laid off, went bankrupt and closed in July 2001. The company's name, domain name and logo seem to have revived Amazon's power supply online store to sell non perishable goods.
Pets.com, founded in 1998, is an online retailer of pet products, including food and supplies. It received more than $100 million in venture capital and was made public in February 2000, raising another $82.5 million. Its mascot is a cute and popular dog puppet. In the advertisement, with pets on the street, the catchy slogan is, 'pets. Com. Because pets can't drive. 'marketing, the company spent millions, including more than $100 million on a Super Bowl ad, resulting in a much higher acquisition cost per customer than normal (possibly up to $300) Pets.com acquired its competitor petstore.com,,, and worked with Amazon to acquire 30% of the company.
Pets.com's stock price peaked at $14 a share, but fell to less than $1 a share in the same year. The site never gets beyond losing more than it every time it sells points Pets.com issued a $1 million 470 thousand loss in the first three quarters of 2000. After the collapse of the Internet bubble, it could not further raise capital needs to maintain its operation [source: Goldman Sachs. It closed in November 2000. It is worth mentioning that after failing to find a buyer, the company refused to apply for bankruptcy and decided to sell its assets and distribute them to its shareholders so that they did not leave much money.
Kozmo.com, started in March 1998, offers a variety of items, such as convenience food, drugstores and online video games and movie rentals, hoping to deliver without delivery charges and minimum orders within an hour. You can get electronic products such as game systems and movie players, but you can also deliver them to your face value project just for a pack of gum or candy bars and a Kozma bike express.
Amazon invested 60 million US dollars in tunes at Kotz &; &; Ma and accepted 31% of its shares in the company. Kotsma also works with Starbucks to pay for their privileges to locate kotsma video delivery in their stores and offer limited options for Starbucks delivery of goods. This service is convenient and popular with customers, but the business model proved to be unsustainable because most orders cost more to provide than they come back. Each market requires warehouse space and a large number of workers, who also suffer from too fast expansion to multiple markets. Eventually kotsma realized $10 in fees and began to make profits in three nine city areas, but it came too late to save the company. The postponement of the initial public offering, which had been planned for June 2000, was finally closed in April 2001 due to the ailing market. Christie lagusa, kotsma's former CTO, started a similar delivery service in 2005 called the biggest delivery. It has been in lower Manhattan for many years, with reasonable pick-up fees, and is now expanding to work in other parts of New York City. Focus on a single location, slowly all pricing, product structure and customer service kink, a small, but profitable company sprang out of the kotsma idea.
Flooz allows users to buy virtual currency (also known as flooz), which can be used to replace credit cards on dozens of online retailers' websites, such as J. crew's, Barnes and noble, recovery hardware, Starbucks and tower records. Gift certificates can be used to compete in multiple online stores. American Express and other companies even gave flooz loyalty rewards. The company raised more than $43 million in investment funds and approved UBI & middot; Goldberg, who is a successful advertising campaign in the company's equity payment [source: CNET technology information carrier's Flooz customers purchased about $28 million, compared to 1999 and 2000. But flooz shut down suddenly, unexpectedly, from the customer's point of view, during August 2001, and shortly after that, filed for bankruptcy.
People have bought but not redeemed their flooz, staying in trouble with retailers no longer accepting their payments. Although some of the lower retailers' currency and Internet bubble bursts may contribute to the company's financial difficulties, it has been reported that Flooz may be paralyzed by criminal activities. The overseas letter of credit fraud ring apparently purchased $300000 flooz with the stolen credit card, prompting flooz to freeze its own credit card processor and account. Like many start-ups, it doesn't have a lot of money to back it up, and it may be difficult for companies to pay customers to buy retailers and accelerate their demise.
EToys, founded in 1997, aims to dominate the online toy market When it went public in May 1999, it raised $1.66 million. The company has spent a lot of marketing efforts competing with retailers such as toys r us, Wal Mart and Amazon. It has also signed agreements with AOL, discovery toys and gap to increase its risk EToys managed to acquire about 200 million customers and started a successful UK branch. The company suffered a public relations blow due to the delay in delivery of toys due to the 1999 holiday season, but shot online sales in r us. Then it laid out $150 million to build new distribution centers in Virginia and California. Despite the increase in sales, eToys lost millions of dollars a quarter in less than expected revenue during the 2000 holiday season. It has also accumulated $24.7 billion in debt.
The stock price of eToys has risen from about $86 per share to about 9 cents per share at its peak [source: BBC news, foreign countries]. Rival Toys R US is working with Amazon to strengthen its online sales. In a familiar story, eToys is unable to find enough new capital investment to keep things going after the consumer boom, bankruptcy at dot com. It closed its UK website in early 2001. In March 2001, February 2001, the company filed for bankruptcy, closed down and laid off about 1000 workers from January to its closing KB toys buys and revives eToys, which pays $5.4 million, about $400000 in inventory, and an additional $33.5 billion eToys site, name and logo KB toys go 'in the days to come, but etoys.com still exists - in new ownership.
Napster's difference: it's not a bust, kill it, and the site reappears, although changing form. Founded in 1999, Napster is an early point-to-point music sharing promoter index website for users to host music on the Internet. It allows users to easily search and download a variety of music for free. This is popular, reaching 80 million users [source: Mega] in its heyday. The company ran away from the music industry and tried to sue Napster for copyright infringement with the major trade organization, the RIAA, but its company struggled for a while. Bertelsmann, a German media company, paid millions of Napster companies to develop a secure music distribution system, which led to Bertelsmann being involved in some anti Napster lawsuits to help keep Napster (ironically, Bertelsmann, a musician, was also charged with killing Napster. )
The legal ban finally came to Napster in July 2001