eToys.com Christmas Party 2000

At the eToys.com Christmas party in December 2000, the mood was equal parts festive and desperate. The company was burning through cash, the stock had already collapsed, and everyone in the room could sense the music was about to stop. As the drinks flowed, the staff—many still clinging to the dream of dot-com riches—went wild, dancing, cheering, and partying like it was their last hurrah. Beneath the laughter and chaos lingered a strange awareness: this was the final celebration before the crash.

eToys was one of the most prominent casualties of the dot-com bubble. Founded in 1997 as an online toy retailer, it quickly became a darling of Wall Street with its colorful branding and promises of becoming the "Toys R Us of the internet." At its peak, the company reached a market capitalization of over $8 billion, fueled by hype and investor enthusiasm. But behind the glossy ads and flashy IPO, eToys faced fundamental problems: slim profit margins on toys, expensive marketing campaigns, and enormous investments in infrastructure that far outpaced its revenue. The 1999 holiday season exposed its weak logistics when it failed to fulfill thousands of orders on time, badly damaging customer trust.

As the dot-com bubble burst in 2000, eToys’ unsustainable business model unraveled quickly. Its stock, which had traded at $84 per share in 1999, collapsed to under $1 within two years. By February 2001, the company was nearly out of cash and laid off most of its employees. On March 7, 2001, eToys officially filed for bankruptcy, leaving warehouses full of unsold inventory. The company’s brand and website were later bought by KB Toys, but its spectacular implosion became one of the most symbolic failures of the dot-com era, representing the dangers of overexpansion, hype-driven valuations, and chasing growth without profitability.