The 10 Biggest Tech IPO Fails of All Time

Went public: Nov. 13, 1998

Before Facebook hit the scene, TheGlobe.com was considered the first social networking site, allowing users to create, customize, and share content with others. The company went public in ’98 and posted the largest first-day gain of any IPO at the time with its stock offer increasing from $9 to $65. That's a 606 percent advance. The celebration was short-lived as the online service became a victim of the dotcom crash, with its shares plunging from $97 to 10 cents within a two-year span.

Went public: May 20, 1999
Stock price drop: $84 to $0.09

With Toys 'R' Us and Amazon dominating the toy market, no one ever saw eToys becoming an overnight success. But through word of mouth it pulled together $166 million for its IPO. The online toy store went public at $20 a share, which surged to $76 by the end of its first day. So how did eToys become such a flop? Failure to keep up with Christmas orders, plus the over-investment of two warehouses and advertising resulted in the company's stock dropping from $84 a share to 9 cents in two years. Bankruptcy followed in 2001.

Went public: June 8, 1999

Drkoop.com was hailed as the WebMD of its time. This health information domain created by former Surgeon General Dr. C. Everett Koop drew 1.4 million unique visitors per month and easily raised $88.5 million for its IPO. AOL caught wind of the company and shares began peaking at $45.75 each, resulting in a 4-year deal that rewarded the site $89 million. But like most start-ups in the late 90s, it became entrenched in the dotcom crash and bled tens of millions each quarter, flatlining in late 2001.

Went public: February 2000

The online pet-supply retailer gained a ton of attention through clever marketing (a multimillion-dollar Super Bowl ad) and its sock puppet mascot. Those factors alone helped the company raise nearly $82 million for its IPO and mark individual shares at $14. However, terrible business practices such as undercharging shipping costs and selling products at one-third of the price forced Pets.com into the financial dog house, as stocks plummeted from $11 per share to 19 cents.

Went public: March 2000

The UK-based travel site grew rapidly on the international front and gained a U.S. following during the dotcom boom. Even when it doubled its share price to $6, the company generated a 28 percent gain on its first day. Two weeks later shares plunged and after Travelocity acquired the company in 2005, investors found themselves selling shares back at $2.75 each. Doesn’t take a math whiz to see why this was a massive IPO failure.

Went public: March 2000

Webvan was a perfect example of great concept, horrendous execution. The online grocery business promised customer deliveries within 30 minutes (or less) and expanded across 10 markets in its first 18 months. That helped the company raise $365 million for its IPO with shares peaking at $34. But a focus on infrastructure growth rather than profit margins caused Webvan to implode, falling to six cents a share and closing shop in 2001.

Went public: August 2000

The electronic monitoring device manufacturer seemed destined for failure. First it dropped its initial public offering of 9 million shares to 6 million. After that it marked down the share price from $15 to $10. The moment Lantronix finally went public, shares declined 20 percent on day one. Underwriter DLJ acquired Lantronix and were soon caught in the middle of a federal investigation by security regulators for forcing an analyst to push the company's already doomed stock. In the end, Lantronix’s shares were valued at 70 cents a piece.

Went public: May 24, 2006

The VoIP giant became a huge success in the early 2000s and looked to reign supreme by priming itself for an IPO in 2006. Vonage crushed all expectations at first, raising over $530 million and going public at $17 a share. Then a technical glitch occurred, which informed customers their stock purchases never went through, thus leading to a 30 percent share-price drop that first week. Those who brought shares were then told their transactions went through and still had to pay the original stock price per share. A class action suit followed, rewarding $800,000 in damages to angry buyers. Cue the Vonage commercial theme music.

Went public: Sept. 23, 2009

In China, Shanda Games is praised as an online gaming juggernaut. So when it decided to make moves over to the states and go public, the company called in JP Morgan and Goldman Sachs to determine the number of shares it would sell and IPO price. Nearly $1 billion was raised, making it one of the biggest American IPOs at the time. The decision to raise the IPO rate would be a costly one, as the underwriters struggled to attract new investors to help fortify the price, watching its stock plunge from $12.50 to $1.75 the following day.

Went public: May 11, 2011

One year fresh out the public gate and the adult entertainment corporation's IPO has been dubbed a flop. The sex-oriented social network opened the market at $8 a share and entered 2012 on a decline with stock marked at $1.20 a share. The financial turmoil also stretches outside of the company's public offering with its cash balance being reported at $34 million—an $8 million loss from last year. Terrible look for a collective that raised $50 million during its IPO launch.