10 Biggest IPO Flops in History



At the height of its awesomeness, Kozmo.com made you believe that the Internet would indeed solve all of our problems. Kozmo was a movie rental and snack delivery service operating in 10 U.S. cities with the ridiculously beautiful promise of delivering your DVD and munchies in less than an hour with no minimum purchase -- and no tipping!

If you didn't live through the heady dot-com era, it's hard to understand how a company like this ever thought it would make a dime. Private investors even shelled out $280 million to help fuel its rapid growth -- and its armada of Day-Glo orange delivery scooters [source: German].

Kozmo filed plans for an IPO with the SEC in March 2000, but had to back down when the market began its slippery descent. The same day that Kozmo announced the postponement of its IPO, it laid off 24 employees, representing the first wave of massive layoffs that would eventually decimate the company, which at its height employed over 2,000 people [source: Sandoval].

Kozmo tried to save itself by requiring a minimum order of $10 (because each delivery cost them $10), but even that couldn't save it. Like Webvan, Kozmo proved that popularity and a huge and loyal following doesn't always lead to profitability.