etoys_283_224Is today like 1999? Consider:

1999: eToys Inc., a startup Internet retailer, goes public on NASDAQ. Initially expected to be priced at $10-$12 per share, the stock is underwritten at $20 and quadruples before the opening bell can even ring.

The first trade is at an astonishing $83 9/16. The shares close the day at $76 9/16, a one-day return of 282.8%.

Just 19 months later, on February 26, 2001, the company announces that it will file bankruptcy.

(It was acquired by Toys “R” Us in February 2009).

via Jason Zweig
 

 
Source: Benjamin Graham (with Jason Zweig), The Intelligent Investor (HarperBusiness, New York, 2003), pp. 443-444; (etoys1; eToys 2)

Category: Bubbles, IPOs, Sentiment

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2 Responses to “Today in Bubble History: eToys IPO”

  1. ch says:

    Greece defaulted a little over 2 years ago, unemployment is over 20%, old people are dying for lack of meds, a Neo-Nazi party is making in-roads in their political system & they just issued debt at 4% that was 4x oversubscribed.

    Venezuela, who just issued 6% coupon debt acknowledges that official inflation is running at 30%.

    Bubble isn’t in equities, it’s in sovereign debt credibility…westerners only care about nominal returns…as a London apartment just sold for $200m.

  2. eToysLaser says:

    Though this particular article reference gets it more right than most (others always report the stock went to – only – $75); the fact of the matter is – there’s a Much BIGGER picture here than has meet the eyes of the public at large.

    Who was the CEO of Bain Capital when it merged ‘The Learning Company’ with Mattel
    (and lost investors $3 Billion swiftly)?

    Who was the CEO of Bain Capital when it acquired Kay Bee and then acquired eToys?
    (As KB exec paid himself and Bain Cap $100 million before filing bankruptcy of Kay Bee).

    Who owned Stage Stores that had Michael Glazer (CEO of Kay Bee) as a Director;
    and Barry Gold as Stage Stores director’s assistant who hired Paul Traub’s law firm?
    (Where Traub then became creditors counsel of eToys, put in Barry Gold and sold eToys to

    CEO Bain Capital, CEO Kay Bee

    While reducing prices at the direct material adverse harm of their court approved clients

    eToys!