eToys.com was a retail website that sold toys via the

Internet The Internet (or internet) is the Global network, global system of interconnected computer networks that uses the Internet protocol suite (TCP/IP) to communicate between networks and devices. It is a internetworking, network of networks ...

. It was established by a

startup company A startup or start-up is a company or project undertaken by an Entrepreneurship, entrepreneur to seek, develop, and validate a scalable business model. While entrepreneurship includes all new businesses including self-employment and businesses tha ...

of the same name on November 3, 1997. After an

initial public offering An initial public offering (IPO) or stock launch is a public offering in which shares of a company are sold to institutional investors and usually also to retail (individual) investors. An IPO is typically underwritten by one or more investm ...

on January 4, 1999, the company quickly shot up in value, becoming emblematic of the

dot-com bubble The dot-com bubble (or dot-com boom) was a stock market bubble that ballooned during the late-1990s and peaked on Friday, March 10, 2000. This period of market growth coincided with the widespread adoption of the World Wide Web and the Interne ...

. The company went bankrupt on April 1, 2001, and shut down soon thereafter. The etoys.com domain went through a number of changes of ownership afterwards, and has been owned by Toys "R" Us since February 2009.

History

eToys was launched on November 3, 1997, as an Idealab company. In 1999, eToys held an IPO. Shares were issued at $20. At the end of the first day of trading, the stock closed at $76 a share. eMarketer was once quoted as saying; "Put simply, eToys is the benchmark against which all other toy sites are measured". In 1999, the company was involved in a high-profile dispute with Swiss art site etoy. EToys attempted to seize the etoy.com domain from etoy on the grounds that it was confusingly similar to its own domain, but it relented after widespread Internet outrage.

Bankruptcy

Around March 7, 2001, ''

The Wall Street Journal ''The Wall Street Journal'' (''WSJ''), also referred to simply as the ''Journal,'' is an American newspaper based in New York City. The newspaper provides extensive coverage of news, especially business and finance. It operates on a subscriptio ...

'' reported that KB Toys acquired the bulk of eToys' remaining assets for $5 million. Bain Capital owns KB Toys. The law firm Traub, Bonacquist & Fox represented the creditors in the

Chapter 11 bankruptcy Chapter 11 of the United States Bankruptcy Code ( Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, w ...

proceedings. Paul Traub, a partner in the firm, had shortly before formed a company called Asset Disposition Advisors, LLC with Barry Gold. This relationship became controversial when Gold was appointed CEO of eToys. Some complained there was a conflict of interest, though a judge later found no fault.

Subsequent ownership

Nearly all the eToys assets were acquired by KB Toys in two separate

bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the deb ...

auctions, then later sold to D. E. Shaw, a New York-based

hedge fund A hedge fund is a Pooling (resource management), pooled investment fund that holds Market liquidity, liquid assets and that makes use of complex trader (finance), trading and risk management techniques to aim to improve investment performance and ...

. The eToys.com website was eventually reopened by eToys Direct Inc., a descendant of Internet startup and KB Toys partner Brainplay.com, and a subsidiary of Parent Company. It continued to market toys by mail order under the eToys name through both the website and printed catalogs. Parent Company and nine of its subsidiaries including eToys Direct filed for Chapter 11 bankruptcy on December 22, 2008. eToys.com was acquired by Toys "R" Us in February 2009.

References

{{reflist

External links

eToys.com
Toys "R" Us American companies established in 1997 Retail companies established in 1997 Internet properties established in 1997 Retail companies disestablished in 2009 Internet properties disestablished in 2009 Toy retailers of the United States Online retailers of the United States Defunct online companies of the United States Companies that filed for Chapter 11 bankruptcy in 2001 Companies that filed for Chapter 11 bankruptcy in 2008 Dot-com bubble 1999 initial public offerings