Every bubble needs a mascot, and the dot-com bubble got a sock puppet. Pets.com sold pet food and supplies online, which is a fine idea now and was a fine idea then — except that the company sold many items below what they cost to buy and ship, on the theory, common in 1999, that you grabbed the customers first and worked out the profits later. The puppet was genuinely beloved. It appeared on Good Morning America and in a Super Bowl commercial. The business underneath it was a machine for converting investor cash into dog food at a loss.
The IPO, in February 2000, raised US$82.5 million — and landed within weeks of the exact top of the Nasdaq. From there the window closed. The capital markets that had been handing money to anything with a “.com” suddenly wanted to see a path to profit, and Pets.com did not have one it could reach before the cash ran out.
In November 2000, about 268 days after going public, it announced it was winding down. The puppet was retired. The figure above is what the shareholders kept. It became the standard shorthand for the entire era — the company everyone points to when they want to explain what “dot-com bubble” means.
The Bureau's finding: a memorable advertisement is not a business model, and “growth now, profit later” only works if “later” arrives before the money does. Case closed — the puppet, at least, found work in other commercials.