Top 10 Worst Timing EverNovember 16, 2008
We all wish we could have done something differently at some point in our lives. Perhaps you invested in stocks at the height of the internet bubble, or maybe you purchased a used car only to have it break down on you the next day. Well, don't feel so down because your bad timing is probably nothing compared to the examples we're about to show you.
Some of these bad-timing decisions have cost their owners billions of dollars. Some have cost them their reputation. We encourage you to add to the list in the comments section below.
At the height of the dot-com boom, Inktomi decided it needed fancy new headquarters so they had Legacy Partners construct a $200 million office building in Foster City, CA. Problem was, by the time it was finished, the dot-com boom had fizzled and Inktomi couldn't afford to move in. The building sat totally vacant for months and Inktomi had to pay a $50 million termination fee to get out of the agreement. They actually got lucky since they could have been legally forced to purchase the building.
Back in October of 1999, [email protected] paid $780 million for one of the ugliest web sites in history - Blue Mountain Arts. They issued approximately 11 million shares worth $430 million and paid the remaining $350 million in cash. They purchased the site not because it made lots of money, but because it received lots of traffic.
The internet bubble burst just 2 months later. It's one thing if they had issued just stock, but they gave up $350 million of much needed cash. On September 13, 2001, [email protected] sold Blue Mountain Arts to American Greetings for less than 5% of what it had paid less than two years earlier.
On the cover of their October 2008 issue, Smart Money Magazine declared:
DOUBLE YOUR NEST EGG: Now is the Time to Jump Into Cheap Stocks, Funds and Real Estate
Only problem: The issue came out September 16, 2008, the day the stock market started its worst drop since the Great Depression. The Dow Jones, which was 11,500 when the issue came out, has since dropped to as low as 8,200 (nearly a 30% drop).
Just as the worst global meltdown since the great depression is starting, the Westfield's $2 billion mall opened its doors in London. This is the largest mall Europe has ever seen and is considered to be the worst timing in the history of shopping.
This past summer, a young couple moved into their $300,000 two-bedroom house in Kingsteignton, England, excited about owning their first home. 30 minutes after moving in, a freak flood destroyed their house and all their belongings.
"I looked out the window and I saw these giant puddles starting to merge and drift towards our gate. Within minutes we had six inches of water through the house. Everything was ruined and there was nothing we could do to stop it. We had sat down for half an hour to enjoy our new place. That's all we ever got and then we had to move out straight away."
In what has to be one of the worst-timed press releases in political history, the Republican National Committe issued a statement on November 3rd complaining about Obama visiting his sick grandmother in Hawaii. At issue was whether the trip should have been paid for with campaign funds.
The bad timing: The press release was issued at 1:30 PM. That same afternoon, Obama and his sister released a statement announcing their granmother had just passed away.
Less than one week after the US government committed $85 billion to bail out AIG, company executives headed for a week-long retreat at a luxury resort and spa where rooms cost over $1,000 a night. The company paid more than $440,000 for the retreat which included over $20,000 for massage and spa treatments.
To make things worse, AIG later asked the government for another $40 billion in loans while secretly gathering at another luxury resort in Phoenix. AIG made significant efforts to disguise the conference, even making sure there were no AIG logos or signs anywhere on the property. Consequently, a key Democratic lawmaker called last week for the resignation of AIG's CEO.
In an effort to promote the release of the latest Guitar Hero video game, Activision sent out drum sticks to fans sponsored by Travis Barker. Unfotunately, the motto "Play with Fire" wasn't exactly the most appropriate considering Barker had just survived a fiery plane crash in which 2 people were killed.
The BlackStone Group, once regarded as the leading private equity fund, acquired Hilton Hotels for $26 Billion in cash last summer. This was the biggest equity investment ever made by the 23 year old firm and it turned out to be one of the worst timing in business history. The hotel market took a terrible nosedive after the acquisition and analysts believe much, if not all, of the equity BlackStone invested has been wiped out.
On July 24, 2001, Silverstein Properties purchased a 99 year lease on the World Trade Center for $3.2 billion. The entire complex including the Twin Towers was destroyed less than 2 months later in the worst terrorist attack in US history.