February 17 - Stevan
Find out how one of the dotcom bubble's most iconic companies came to crash and burn...
The stock market: a place where money can be made and lost. The market’s also where reputations can be made or broken – and some people or incidents can live on in infamy…
In this section, which serves as a counterpart to the ubiquitous Monday Motivation posts that can get on a cynic’s nerves, we spotlight the blunders, bloopers and swindlers of the stock market.
Suffering from Monday blues? The only consolation we can offer is – it can always be WORSE!
Monday Demotivation: Pets.com
It’s probably one of the more recognisable names from the dot-com bubble in the early 2000s. Pets.com was the online one-stop shop for all your pet supplies. How could this possibly fail, you think?
It was hard to imagine then that Pets.com ‘s mascot, the wacky dog-like sock puppet, would go on to become an icon symbolising the dot-com bubble burst.
When Pets.com first started, it enjoyed strong sales. But as they say, the higher you rise, the harder you fall…
In 2000, Pets.com shelled out big for advertising and marketing. The e-commerce site needed to quickly generate brand awareness in the US so they spent a fortune on commercials, including an expensive Super Bowl spot. The campaigns turned their puppet into possibly the most famous sock ever.
Unfortunately, while Pets.com spent nearly $12 million on marketing campaigns, it was not getting enough orders of dog food and chewy toys to cover up costs. In fact, just in the first nine months of 2000, the company lost $147 million.
When the company went public in February that year, their stock was trading at $11 per share and the future looked bright. Shareholders were probably celebrating when the stock sailed up to $14. But then it went downhill hard – all the way down to $1 a share – becoming as good as worthless.
By November 2000, it was curtains for Pets.com, with its demise leaving 300 people unemployed. Including an out-of-work sock puppet. Though it made a comeback in 2002 in commercials for a car rental company.
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