8 Really Bad Investments That Lost a Bundle

A million here, a million there and pretty soon an investment can wind up adding up to real losses. What seems like a great idea one day can all too soon turn into an obvious mistake.

As a companion to our 8 of History’s Best Investments slideshow, we narrowed our hindsight to the recent past, dipping into mostly Web investment history and a few others. The dot-com bubble provided a litany of choices (think pets.com and its famous sock puppet), but it wasn’t the only source of bad investments. Even a great investor like Warren Buffet had the misfortune to make our list.

Check out AdvisorOne’s list of 8 Really Bad Investments.

8.  Investment: Boo.com

Investor: Omnia fund

Loss: $30.8 million ($42 million today) in 1999

The dot-com bubble led to a lot of big investment losses. One of them was Boo.com, a British website that sold branded fashion apparel online. The company burned through $188 million in investment money in a year and a half. Almost one-sixth of that money belonged to the wealthy Hariri family, which boasted among its members a former prime minister of Lebanon, Rafik Hariri. It might have been a fashionable jump into a dot-com investment, but a poor user interface, a high rate of returns by customers and lower-than-expected sales led to the company’s quick demise. Fashionmall.com took over the remains of the company.

7. Investment Flooz.com

Investors: Various venture capitalists

Loss: $35 million ($43.6 million today) in 2001

Why would anyone invest in creating an online currency? We aren’t quite sure, but venture capitalists did when they backed flooz.com to the tune of $35 million in 1999. Whoopi Goldberg was enlisted as a spokeswoman. But, alas, despite retailers like Barnes & Noble and Starbucks agreeing to accept the currency, the idea flopped miserably. A Russian credit-card fraud scheme was the final nail in the company’s coffin. A competitor, Beenz.com, also failed, closing shop before declaring bankruptcy. Thankfully, Bitcoin is offering the same kind of product for those investors who won’t give up on the idea of creating an Internet currency.

6. Investment: Boston Globe

Investor: The New York Times

Loss: Estimated in the hundreds of millions

When The New York Times Co. purchased the Boston Globe in 1993 for $1.1 billion ($1.72 billion today), the price was astounding. Still, despite the record price for the Beantown newspapers and some other media properties, it seemed like The Times could still turn a profit on the deal. Then the Internet changed the newspaper business, and what was once the most valuable newspaper in the world became an albatross around the Gray Lady’s neck. An attempt to sell the Globe in 2009 reportedly netted an offer of $59 million plus the assumption of pension obligations. Other newspapers that were part of the Globe chain were sold for $143 million in late 2011. This year, The Times hopes to fetch $150 million for thr Globe and Worcester Telegram.

5. Investment: Pets.com

Investor: Amazon.com (30% stake), others

Loss: $50 million ($68.4 million today) in 2000

A splashy ad campaign (including the Super Bowl), a famous mascot (who doesn’t like sock puppets?) and a possible customer base of millions and millions of pet owners just weren’t enough. Even $50 million in investment capital couldn’t keep the company afloat. Much of the problem can be traced to a business plan that included selling items below cost. Increased sales in 2000 only led to bigger losses and the shuttering of the company.