Bubbles that burst

The Dotcom

Internet related investments remain interesting.
All have seen almost speculative frenzy of investment in internet related investments.
Everybody thinks internet related investments will prosper – future of technology is going to stay!
Venture capitalists jumped when those techies can show profits in short time.

Have seen 1999 stock market peaks.
But this was short-lived.
Stock markets plunged, with Nasdaq falling by over 70% in 1999.

1) Brian Hunter, a star trader at Amarnath- an American hedge fund – made big money, betting money on price of natural gas.
But they wrongly forecast that storms like Katerina would push up the gas price.
But this pulled them down – it did not happen as forecast. Amarnath losses amounted to $6 billion.

A civil case was instigated by regulators for manipulating natural gas markets.

2) Time Warner and and American Online merged thinking merger of old and new technology would be profitable. But collapse of Dot.com did not allow this to happen. They suffered $100 b loss.

3) British airways
The company decided to paint destinations on tailfinof their carriers. This was not welcome by passangers, public, or Media. Margarett Thatcher orders to remove it. £600,000 gone in the air.

4) car makers make an unwise flight –
Big three – Ford, General Motors, Chrysler executives used to travel in their Corporate jets. This was not liked by public.
So, they decided to travel in the greenest cars their companies made. Not welcome, nor accepted by public.
GM and Chrysler were forced to take bankruptcy protection in June 2009.

5) Dasani
A costly marketing push, launched bottled water plant by Coca-Cola in Britain in 2003.
This was a big failure when reported that water is polluted when coming out of pipes. Company was forced to stop further manufacturing, and had to withdraw 50,000 bottles off shelf. Inspite of sofisticated Purification, the water was found to contan Bromate, a chemical linked with Cancer.


Suresh Shah, www. mypathways.net


Thanks to discussions and talks by Contributors to Business Miscellany

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