eToys.com started from 1997 to 2001. The company raised $166 million in a May 1999 IPO, but in the course of 16 months, its stock went from a high of $84 per share in October 1999 to a low of just 9 cents per share in February 2001.
There are several causes of failure in eToys. One of the failures is technology which has the ability to win other competitors in the same field. This is due to technology are improving tremendous quickly.
Another cause is inadequate reserve cash, where need to calculate before a business is start. It is important to identify the demand and need of consumers. Besides, also need to understand the market demand and needs of consumers. Hence, to get professional advice of business is advisable.
However, pricing also play an important role when the price is too high there will be low number of customers. Besides, the needs to know the price of products those customers are willing to pay for.
Furthermore, the failure are spending millions on advertising where have outweighed company’s income. Company should be aware of fine line between effective advertising and over advertising. There are many methods to produce great and minimum cost advertising such as brochures, catalogs, direct mail, and web site.
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The entity of eToys failed because it was "designed" to fail. The concept is still there, again, as a classic dot com. (NASDQ stock symbol KIDS)
Going public in 1999 for $8bn and bankrupt in March 2001, one of the very first things that occurred was the Destruction of Books n Records as they had many things to hide.
The DOJ is now protecting the perpetrators of $300 million and fraud, even after they confessed to 34 acts of perjury.
http://fraud-corruption-mnat.townhall.com/default.aspx
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