8 Most Infamous Tech IPO Failures
Bangalore: Initial Public Offering: The first chance for any company to prove their business is actually worth the millions they promised to world and the investors. Many of the companies proved true to their word after they went public, but some others took a down turn from the very first day of public trading and eventually went bankrupt.
The massive IPO’s and amplifying price of acquisitions in recent times made some people worried about- the approach of another tech bubble- as the current conditions (ridiculous level of spending from both executives and the VCs) are exactly what prevailed during the burst of first tech bubble.
A lot of self-proclaimed leaders collapsed in the first dot-com burst, causing the investors and customers to lose huge amounts. Here we list the most infamous tech flops of the dot-com era compiled by CNBC.
Webvan, the online credit and delivery grocery business, which offered the delivery to customers in a 30 minute window of their selection, grow to 10 markets in just 18 months. The company had plans to expand to 26 cities between 1999 and 2011. It even placed a $1 billion warehouse order boosting the hypes of IPO.
The company’s growth gave confidence to the investors and as a result, it raised $365 million in its 1999 IPO. But after the values peaked to as high as $34, the shares started to sink just over a week after the IPO. With the thin margins from its grocery business, the company failed to attract the customers at the necessary pace. Its share value eventually hit 6 cents, after which Webvan went bankrupt in 2001. It is considered as one of the largest in Dot-com flop history.