FOOL PLATE SPECIAL
As more dot-coms bite the dust, some common themes have emerged. Companies that still hold out hope for their survival routinely talk of setting themselves on the "path to profitability" while warning of bumpy roads ahead. Those no longer able to fool even themselves sound a more somber note.
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"You mean Garden.com was actually a public company?"
Yes, actually, it was, as investors who lost hard-earned tulip bulbs in Garden.com's (Nasdaq: GDEN) sad harvest surely know. On Wednesday the company said it started the "phased shutdown" of its retail operations. The assets of its consumer business are up for sale -- lock, stock, and URLs -- "as well as other intellectual property," the company said. Also about to come on the market are Garden.com's green-thumbed workers, as the company conducts "a phased layoff of its consumer business employee base." Shares of Garden.com are currently trading in the permafrost -- which doesn't necessarily make them a bargain.
It's sometimes hard to keep the players straight. Was it Pets.com or Petstore.com that announced it was preparing to put itself to sleep?
The confusion is understandable if you haven't been following closely. But, investors who got sent to the pound on these unvetted investments know that Petstore.com's domain name and trademarks, customer list, business partnerships, original content, and live fish business were purchased by Pets.com (Nasdaq: IPET) last summer.
They probably also don't need reminding that, while Pets.com played conquering survivor to the failed Petstore.com, its stock was trading at all-time lows around $2 a share, down more than 85% from the all-time high of $14. Of course, "all-time" in this case means since its IPO all the way back in February. As a mange-covered lesson in "How Low It Can Go," it should be noted that Pets.com shares have since slithered another 95%. They currently trade at around $5/16, or 31 cents each.
Furthermore, visitors to the Pets.com website now see the notice "We have closed our virtual doors effective November 9, 2000."
Press release as obituary
Some common themes have emerged. Companies that still hold out hope for survival -- perhaps justified, perhaps not -- have routinely talked about setting themselves on the "path to profitability" as they warn of bumpy roads ahead. These companies announce restructuring and reorganizations with phrases so similar they read like boilerplate lifted from How to Fail in Business Without Really Lying: The Dot-Bomb Edition.
Companies no longer able to fool even themselves sound a more somber note. Amid talk of extensive and comprehensive efforts to find and evaluate "strategic alternatives," the bottom line, as Garden.com bluntly laid it out, is that there are "no companies or investors interested" in these companies as "full-going" concerns. While Garden.com's search "included contacts with several interesting prospects, none were prepared to fund or acquire the company."
The inability to find takers for a going concern speaks of more than just a viable company hitting a down cycle. The self-written obituaries of failed Internet companies have been streaming in at an accelerated rate lately. Pets.com, Furniture.com, Living.com, Garden.com, MotherNature.com, Streamline.com -- the hits just keep on coming. Jeff Fischer looked at Pets.com and similarly fated companies in a recent Rule Breaker article.
A Friday Fool Plate Special took a closer look at a breed of company especially susceptible to this fate -- those that go by a generic brand name, or a common noun with a dot-com attached to the end. It compared the generically named drugstore.com (Nasdaq: DSCM), buy.com (Nasdaq: BUYX), and others to Nike (NYSE: NKE), Starbucks (Nasdaq: SBUX), and Coca-Cola (NYSE: KO).
"Naming yourself after your segment of the economy is not an effective way of separating yourself from the others in the segment," as Bob Fredeen Foolishly put it in Yet Another Lesson for E-tailers. That's something worth thinking about as the autumn of the dot-com meltdown moves into the winter of its discontent.
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