It’s no secret that while investing has its rewards, it also comes with risk. Sometimes, an investment can fail big time. We will be taking a look at the ten most notable investments that have not only failed to meet expectations but have ended up being master classes. We will also examine how investors should become more cautious when it comes to investing in the right assets. It’s also vital that you perform your due diligence before making a move – otherwise, you might end up seeing an investment fail quite like these 10 we will be taking a look at.
- WeWork
First, we begin with WeWork. This was considered one of the companies that had solidified the future of what office faces would look like, to the point where it drew in billions of dollars in investments. However, the company faced disaster in 2019 after its IPO failed to materialize. As a result, the company’s valuation took a massive hit, dropping from 47 billion dollars to just around $8 billion dollars.
- Theranos
Founded by Elizabeth Holmes, Theranos was designed to promise technology that would change the game when it came to blood testing. Many companies made investments along with significant investors and venture capitalists. The valuation of Theranos reached 9 billion dollars until it was exposed as a fraudulent company.
It was one of the biggest gambles, even for high-powered investors. Sadly, it failed, and Holmes was charged and convicted of fraud. One more good reason why you should do due diligence, it is so important when it comes to making the right investments. You’d be better off gambling at a casino online instead of just throwing money at an investment that might sound too good to be true.
- Quibi
Quibi Was designed to become one of the Revolutionary driving forces in the mobile video streaming space. Its intent was to provide short, high-quality content for those who used it. It had raised close to 2 billion dollars in overall capital. However, the platform failed to attract subscribers and was quickly snuffed out by many of the other competing streaming services that were well-established. As a result, it ceased operations six months after its initial introduction, becoming one of the most embarrassing moves ever made by investors.
- Enron
In 2001, the collapse of Enron had dominated the headlines. This was because it became one of the biggest corporate scandals in American history. Specifically, accounting fraud and financial mismanagement would lead to the downfall of the once-respected giant in the energy industry. Shareholder value was once appraised at billions of dollars. After all was lost, investor confidence in corporate governance was significantly reduced.
There’s a lesson here. If Enron collapses, a company like Amazon – despite its $2T valuation – could collapse if something goes wrong, such as fraud, mismanagement, or something that would be gargantuan enough to take down the largest online store ever. But let’s not panic and fear the worst, we’re just saying.
- MySpace
Myspace was the dominant social media platform in the pre-Facebook era. However, mismanagement and its failure to innovate soon led to its downfall. In 2005, News Corp purchased the platform for $580 million. When it was sold in 2011, the price was $35 million. If that wasn’t enough, what Myspace failed to do was something that Facebook could capitalize on through the years as it grew to become one of the most highly recognized social media platforms in the world.
- Juicero
Juicero was a high-tech juice press that offered its subscription service. It also became one of the biggest blunders for many investors when consumers found out they could squeeze the juice pass using their hands without using the machine, which was priced at $400. Soon after, the company shut down in 2017, with investors fuming. If only one could notice something amiss before the general public did. It would have been one of those companies that investors would be wise to pass up on in favor of something else.
- Segway
The Segway was considered one of the most fascinating innovations in personal transport. Soon after, it would be one of the best ways to move around. It would be used for city tours or getting around at home or in public. Even though the hype was great, along with the Investments that were made, the mass adoption of Segway was a complete flop. This was because it cost too much, and the practicality needed to be improved.
Unfortunately, what looks like a pretty neat innovation to the masses soon becomes one of the biggest investment failures. The moral of the story here for prospective investors is that there is plenty more than meets the eye. Sometimes, a product that has that wow factor might just have a not-so-great backstory behind it as far as business management is concerned.
- Google Glass
Even a tech giant like Google can fail when introducing specific devices to its investors. While the device drew excitement, there came plenty of setbacks as well. People were questioning the privacy concerns and price tag if it became available in retail. And last but certainly not least, the limited functionality became the death knell. For prospective tech investors, one of the most important things to look for in products is whether or not the functionality is good enough to serve the prospective consumer’s needs.
Regarding tech, functionality, and user-friendliness are two things that no company like Google should ever want to overlook otherwise, the users themselves will let you know about it.
- Blackberry
Once Upon a time, Blackberry was considered one of the most dominant brands in the smartphone market. What made it stand out was not only the physical keyboard it had but also its very secure email services. But what killed the Blackberry? The touch screen feature of smartphones was brought to us by Apple’s iPhone and Android devices. As a result, the market share of Blackberry and its stock value would plummet, and investors would be left holding a bag with nothing in it.
- Groupon
Groupon would benefit the masses. especially those who wanted to save money on products and services in their local area. In 2011, the company’s IPO was considered one of the largest for a tech company, valued at nearly $13 billion. However, the daily deal business model ended up being a colossal failure. Of course, the rest was history, as revenues would plummet along with the stock price. Early investors would also lose out on their investments.
Final Thoughts
These top 10 Investments failed to meet the expectations of those who poured money into them. For those who invest wisely, it is important to make sure that you do more than take a look at the stock’s value. Plus, a product that gives off that wow factor might be a short-lived fad that can hurt investors. That’s why it is important to dig deeper and determine whether or not such products or services benefit the target consumer based on functionality, what it does to solve a certain problem, and more.
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