In the cutthroat world of big business, even the mightiest companies can stumble—and when they do, the results can be spectacularly costly. These aren’t just minor errors; they’re monumental blunders that incinerate billions of dollars, turning what seemed like brilliant strategies into legendary failures.
In this list, we’ll explore ten of the most staggering examples of companies that set cash on fire. These stories aren’t just about financial losses—they’re about the hubris, miscalculations, and unforeseen challenges that can derail even the best-laid plans. As you read, you’ll see how quickly things can go wrong when billions are on the line and how these colossal mistakes are powerful lessons in the unforgiving arena of global business.
Related: 10 Legitimate Business Industries That Seem Like Scams
10 Gateway’s Rapid Expansion
Gateway Inc., once a household name in the personal computer industry, offers a classic example of how rapid growth can spiral into a costly mistake. Founded in 1985, Gateway quickly captured the market’s attention, with sales skyrocketing to over $1.1 billion by 1992 and revenue peaking at $6.29 billion in 1997. But in its race to grow, Gateway stumbled. The company’s aggressive expansion led to sprawling manufacturing facilities and a bloated executive team, all while quality control took a backseat.
As Gateway continued to push for growth, the cracks became impossible to ignore. Shipping delays, poorly assembled products, and frustrated customers began to tarnish its reputation. Adding to its troubles, Gateway’s misguided attempt to break into the consumer electronics market only stretched its resources thinner, leaving the company vulnerable as rivals like Dell and HP capitalized on the booming laptop market.
In a desperate bid to stay afloat, Gateway acquired eMachines in 2004, but by then, the damage was done. The company was sold to Acer in 2007 for a fraction of its former glory. Gateway’s story is a powerful reminder of how unchecked growth and strategic missteps can turn success into a financial disaster.[1]
9 Xerox’s Squandered Opportunity
Xerox’s Palo Alto Research Center (PARC) was a cradle of innovation, developing groundbreaking technologies like the graphical user interface (GUI) and the computer mouse. These inventions had the potential to revolutionize the tech industry and could have positioned Xerox as a leader in personal computing. However, despite having a goldmine of ideas, Xerox failed to turn these innovations into commercial successes, effectively letting billions slip away.
The disconnect between PARC and Xerox’s headquarters in New York—roughly 2,500 miles (4,023 kilometers) away—played a significant role in this missed opportunity. While the engineers at PARC were pushing the boundaries of technology, Xerox’s leadership was deeply rooted in their core photocopier business. This gap in focus and vision prevented Xerox from seeing how these innovations could be the future of computing.
In the end, companies like Apple capitalized on the technologies Xerox pioneered. Steve Jobs famously recognized the potential of the GUI and incorporated it into the first Macintosh, a move that helped shape the future of personal computing. Xerox’s failure to execute on its own innovations stands as one of the most significant billion-dollar blunders in tech history—a cautionary tale of how even the best ideas can fall flat without the right strategy and vision.[2]
8 Iridium: From $5 Billion Blunder to Surprising Salvation
Iridium’s tale is one of colossal ambition, monumental failure, and an unexpected second chance. Launched by Motorola in the 1980s, the $5 billion Iridium satellite network was supposed to revolutionize global communications with its 66 low-Earth-orbit satellites. But by the time it debuted in 1998, the technology was already outdated. The phones were bulky, the call rates sky-high, and the timing couldn’t have been worse. Iridium quickly became a textbook example of a billion-dollar blunder, leading to its bankruptcy in 1999.
Just as Iridium was about to be scrapped, aviation executive Dan Colussy saw an opportunity where others saw only failure. With a little help from the Pentagon, which recognized Iridium’s unique value for military use, Colussy bought the entire system for just $25 million. Instead of letting it crash back to Earth, he repositioned Iridium as a niche service for remote and military communications, turning what was nearly a total loss into a strategic win.
Iridium’s revival is a rare case of a billion-dollar mistake being salvaged and repurposed. What started as an enormous financial misstep ended up becoming a valuable tool for specialized markets, proving that even the biggest blunders can sometimes be saved with the right vision and a bit of luck.[3]
7 Zynga’s $200 Million Misfire
In 2012, Zynga made a splash by acquiring OMGPOP, the creators of the hit game Draw Something, for $200 million. At the time, Draw Something was the talk of the town, and Zynga saw it as a perfect addition to its gaming portfolio. But the timing couldn’t have been worse. By the time the deal closed, the game’s popularity was already declining, turning what seemed like a brilliant move into a costly misfire.
The acquisition quickly ran into trouble. Cultural clashes between Zynga and OMGPOP created internal friction, and what should have been a smooth integration became a struggle. Less than a year after the acquisition, Zynga shut down OMGPOP, laying off most of the staff and closing the New York office. While Zynga retained some assets and intellectual property, the deal ultimately failed to deliver the expected returns.
Zynga’s experience with OMGPOP is a cautionary tale of how even well-intentioned acquisitions can go wrong if the timing and execution are off. The $200 million gamble didn’t pay off, highlighting the risks involved in chasing the next big thing in the fast-moving tech world.[4]
6 Microsoft’s $1 Billion Kin Catastrophe
In 2010, Microsoft launched the Kin One and Kin Two, two phones that were supposed to redefine social media for teens. Billed as “the next generation of social phones,” the Kin was meant to capture a new market segment. But just six weeks after hitting the shelves, Microsoft pulled the plug, marking one of the biggest and quickest flops in cell phone history. The Kin ended up costing Microsoft nearly $1 billion, making it a textbook case of setting cash on fire.
The Kin’s downfall was a mix of bad timing, internal power struggles, and strategic missteps. Originally part of “Project Pink,” the Kin phones were supposed to run on a unique operating system. However, after internal conflicts, Microsoft forced a version of the Windows Phone OS onto the devices, leading to delays and a final product that didn’t impress. Add to that a confusing pricing model and lackluster features, and it’s no wonder the Kin failed to find its audience.
Microsoft’s Kin debacle wasn’t just a financial disaster—it also led to the departure of key executives and tarnished the company’s reputation in the mobile market. It’s a stark reminder that even a tech giant can burn through a billion dollars in the blink of an eye if the execution isn’t right.[5]
5 Groupon’s $6 Billion Blown Deal
In 2010, Groupon had the chance to make tech history by accepting a $6 billion offer from Google. But in a move that left many stunned, founder Andrew Mason turned it down, convinced that Groupon had even greater potential on its own. At the time, the daily deals site was riding high, and Mason’s decision seemed like a bold bet on the future. However, what looked like confidence soon turned into one of the biggest billion-dollar blunders in tech.
As competitors crowded into the daily deals space and the initial excitement around Groupon faded, the company struggled to maintain its momentum. The market was saturated with similar services, and Groupon’s growth began to stall. Meanwhile, the $6 billion offer from Google became a what-if scenario that haunted the company as its stock value plummeted and its early promise dwindled.
Rejecting Google’s offer, which could have been a financial windfall, ended up costing Groupon dearly. Instead of capitalizing on the moment, the company’s refusal to sell marked the beginning of its decline. It’s a stark reminder that sometimes the biggest mistake isn’t the deal you make—it’s the one you walk away from.[6]
4 Webvan’s $800 Million Slip Up
In the late 1990s, Webvan set out to revolutionize grocery shopping with its bold vision of home delivery. Backed by a staggering $800 million in capital, the company was determined to bring groceries straight to your door. But instead of becoming the next big thing, Webvan went down in flames, becoming one of the most infamous disasters of the dot-com bubble. This billion-dollar blunder resulted from a perfect storm of poor decisions and misguided ambition.
Webvan’s first mistake was trying to be everything to everyone. They targeted a mass-market audience with premium services, hoping to outprice competitors like Safeway while offering Whole Foods-level quality. But that strategy attracted price-sensitive customers who weren’t willing to pay for the luxury. Next, Webvan sunk millions into building a complex, high-tech infrastructure from scratch—distribution centers, conveyor belts, delivery algorithms—you name it. It all sounded impressive, but it was a money pit that never paid off.
The final nail in the coffin was Webvan’s rapid, reckless expansion. Before they had even figured out how to make it work in their own backyard, they were rolling out in cities across the country, burning through cash faster than they could make it. By 2001, the dream was dead, and Webvan was bankrupt, its assets being sold for pennies on the dollar. Webvan’s story is a classic example of how to set $800 million on fire—one bad decision at a time.[7]
3 LeEco’s Billion-Dollar Gamble
LeEco, the Chinese tech giant, once set its sights on outshining Netflix, Tesla, and Apple. Under the ambitious leadership of founder Jia Yueting, the company aggressively expanded into streaming services, smartphones, electric cars, and smart TVs. With billions of dollars at its disposal, LeEco appeared poised to dominate the global market. But instead of building a tech empire, it found itself engulfed in financial chaos, burning through billions in what became a textbook case of overreach.
LeEco’s downfall wasn’t just about overambition—it was a perfect storm of poor planning, increased competition, and regulatory hurdles. The company spread itself too thin, investing heavily in various sectors without securing a solid financial foundation. Despite the bold vision, LeEco’s financial house of cards quickly collapsed. By 2017, the company faced massive layoffs, plummeting stock prices, and creditors demanding payment, leaving its grand dreams in ashes.
LeEco’s billion-dollar blunder serves as a stark reminder that even with deep pockets, unchecked ambition without a clear strategy can lead to spectacular failure.[8]
2 Daimler-Benz’s $36 Billion Misstep with Chrysler
In 1998, Daimler-Benz made headlines by acquiring Chrysler for a staggering $36 billion, aiming to create an automotive giant that could rival the world’s best. But what was supposed to be a match made in corporate heaven quickly unraveled into one of the most notorious billion-dollar blunders. The two companies were as different as oil and water—Daimler-Benz, a symbol of German luxury, and Chrysler, a scrappy American carmaker known for its affordable vehicles. The cultural and operational chasm between the two was too vast to bridge, leading to a merger that never found its footing.
Instead of realizing the anticipated synergies, the merger became a textbook case of corporate incompatibility. Daimler-Benz was reluctant to integrate its premium components with Chrysler’s more budget-conscious offerings, fearing it would tarnish the Mercedes-Benz brand. Meanwhile, Chrysler struggled with its own issues, including rising costs and declining demand, which only deepened the financial woes of the union.
By 2007, the once-celebrated merger had deteriorated so badly that Daimler was forced to offload Chrysler for less than $5 billion, a fraction of the original purchase price. What was intended to be a bold step towards global domination ended up as a costly lesson in the perils of mismatched corporate marriages.[9]
1 Microsoft’s High-Stakes AI Investment
In a bold move, Microsoft poured $19 billion into artificial intelligence within just three months, with much of that going toward building and leasing data centers. This massive investment highlights the company’s commitment to leading the AI revolution. However, the financial return on this gamble remains uncertain, and the lack of immediate, significant revenue has some investors questioning the strategy.
Microsoft’s leadership has been upfront about the challenges, emphasizing that AI is a long-term play rather than a quick win. While they remain confident in the transformative potential of AI, the sheer scale of the investment has raised concerns about whether the company can maintain investor confidence in the interim. Despite these concerns, Microsoft’s broader AI strategy, which includes various investments and acquisitions, continues to be a central focus for the tech giant.
Only time will tell if Microsoft’s ambitious AI bet will reshape the industry or serve as a reminder of the risks inherent in such large-scale investments.[10]
]]>One of the biggest forged art scams in history resulted in roughly $80 million being spent on “fake” paintings. So the world of scam art is a booming business if you can pull it off. But art is far from the only industry where you can fake someone out and earn big money in the process. People will sell fake anything and everything if they think they can get away with it. And a good number of them do.
10. Nigerian Scammers Sold a Fake Airport for Over $200 Million
Selling a fake painting is one thing. You can have someone paint it, make it look real enough, frame it and then physically give it to the person you’re scamming. If you did a good enough job on your forgery, it’ll fool your buyer and they’ll hand over the cash. This makes sense and is easy to understand. Now imagine trying to do that with an airport.
In the mid ’90s, three men from Nigeria pulled off a staggering scam in which they convinced a senior bank official from Brazil to use funds from his bank to invest in their new airport. In exchange, he would earn a tidy $10 million commission. Does any of this sound familiar to you? Someone from a foreign land promising a huge financial opportunity at no risk to you and, in return, you take home millions! Yeah, it’s basically the same Nigerian Prince email scam everyone got 25 years ago, only so much bigger. Also, it worked.
The banker funneled a whopping $242 million from his bank to a variety of different accounts around the world. In a surprise twist that probably only surprised him, there was no airport, the whole thing was fake.
The scammers bought multiple properties with their scammed money and lived the high life until they were caught, convicted, and had their assets given to the bank.
9. Up to 30% of Pharmaceuticals Sold in Developing Nations are Fake
In a lot of places around the world, access to medication is limited. This is true in poorer countries and richer ones. Americans have some of the worst markups for pharmaceuticals anywhere in the world and, for many people, the alternative of buying medicine online from another country seems like a great option. And it probably is, if you get what you pay for. The problem is that as much as 30% of the pharmaceuticals sold around the world are fake.
According to the World Health Organization, the counterfeit drug market is worth $30 billion. This has also resulted in the deaths of thousands of people. Even in developed countries, one in ten drugs being sold is not the real deal.
Many of the victims are in developing nations however, in particular in Africa where thousands of African children have died because of getting scam medication for pneumonia or malaria.
So what qualifies as a fake drug? Sometimes it is the real medication but in the wrong dose. Sometimes it’s a different drug and sometimes it’s just nothing at all, maybe a sugar pill or some other placebo with no active ingredients. Point is that they don’t work and they can get people killed.
8. A Man Made Millions Selling Fake Bomb Detectors
The military seems to have bottomless pockets but scamming them has to be something done with nerves of steel, you would think. It doesn’t mean it’s impossible, though. Some people have pulled off remarkable scams, like James McCormick. He made £50 million by selling fake bomb detectors, mostly in the Middle East.
McCormick is believed to have sold around 7,000 ADE-651 bomb detecting devices over a period of years. These could be used at various checkpoints and in secure facilities to detect an explosive to keep people safe. That was the scam, anyway. In reality, the machines were slightly repurposed golf ball finders that did nothing at all.
The golf ball finder was a novelty toy that cost $20. It had a cheap antenna on it that was supposed to move when it detected “elements” in a golf ball, using the same a dowsing rod supposedly detects water. It’s just the unconscious and involuntary movements of the person holding it. There were no real working electronics or science involved at all.
Aside from the stunning amount of money McCormick made selling these scam detectors, the other remarkable aspect of the story was that some places were still using them, even years after the scam was revealed.
7. Fake Pepper Made of Mud Was Sold in China
In 2022, real saffron could cost you as much as $10,000 per kilogram so there’s some precedent for the spice trade being a valuable one. But saffron is a relatively rare spice and one most people don’t have on their counter. It has to be harvested by hand and you can’t grow the crocuses that produce it just anywhere.
Pepper, on the other hand, is one of the most common spices in the world. Salt and pepper are the ubiquitous seasonings on nearly every table in the West. It’s made from ground up peppercorns and it’s a relatively inexpensive spice in much of the western world.
Despite how cheap and abundant it seems, if you can get away with selling fake pepper it’s even cheaper and more abundant. In China it’s been reported that some pepper sold in markets was just dried up mud. In a fun twist, the seller didn’t care that they’d been caught out and said it was no big deal because mud wasn’t going to kill anyone.
6. The Cellular Phoney Was a Fake Car Phone Sold in the ’80s
Gather ‘round, children, for we’re about to talk about the olden times. Once, some decades ago, there was no such thing as a cell phone. If you wanted to call someone, you had a little box with numbers on it attached to the wall of your house by a wire. It was a telephone, and it was the only way to call someone. If you wanted to text, you had to write it on paper and send it in the mail.
Around the time that big, clunky wireless phones first appeared, so too did car phones. For a time they were more popular since wireless phones were the size of milk cartons. But they were not for the average driver. In 1987, a car phone might set you back around $1,400. That would be about $3,700 in 2023.
For the 1980s clout chaser who wanted to look rich and important there was the fake car phone called the Cellular Phoney. It looked exactly like a car phone but it did nothing; it was just a replica. They sold for $16, or $9.95 if you found a sale. The company sold about 40,000 of them, mostly in Los Angeles where people love to play pretend.
5. Fake Amazon Listings Were Used to Scam Walmart Out of PS4s
Some people shop like it’s a life or death mission and getting the best deal possible is the goal. They will cross town and even go to other cities for the best deals. They’ll collect coupons and wait for double coupon days to ravage a store and scour its shelves clean. And they’ll also price match.
Price matching is a simple concept where a store tries to keep your business by selling things you might want to go to another store to get for the same price. You bring in a flyer from the competition that has a better deal, they’ll match the deal. Easy for you because you don’t need to travel, easy for the store because they made the sale and maybe you buy a bunch of other stuff, too.
Walmart learned the hard way that this policy can be exploited by scammers. When Walmart offered to price match online retails for the PS4, people started showing up with fake Amazon listings selling the gaming system for as low as $90 and even $50 in some cases. So Walmart had to sell the normally $400 system for the same price.
Eventually the company clued in and dropped the price match policy for sites like Amazon.
4. Rolling Stone Made a Fake Supergroup That Sold 100,000 Records
Back in 1969 an album was released by the band The Masked Marauders. Members included Mick Jagger, John Lennon, Paul McCartney, and Bob Dylan. It was, arguably, the greatest rock ‘n’ roll supergroup ever. It was also total BS. The band, and the article about them in Rolling Stone magazine, was made up. It was a piece of satire that was published in a magazine not really known for satire, so not everyone read it that way.
The idea started when one of the magazine’s writers, sick of supersession albums, wrote a fake review of an album that never existed. For fun, he showed it to his editor who thought it was great. So they published it.
The album became huge, which is to say everyone wanted it but of course no one could get it because it never existed. But as desire grew, Rolling Stone took it a step further. They recorded the album. A band called the Cleanliness and Godliness Skiffle Band was hired to do impressions of the more famous musicians. Warner Brothers distributed it and they managed to sell 100,000 copies.
The liner notes to the album gave away the joke but, of course, you had to buy the album first to get that far. The chairman of the FCC apparently called the whole thing obscene.
3. The Hitler Diaries Sold For Millions Before They Were Outed as Forgeries
Back in the 1980s, the secret diaries of Adolf Hitler were published, and it was a groundbreaking discovery right up until it wasn’t. Stern magazine paid the equivalent of $3.75 million for the diaries and published them in 1983.
The diaries were authenticated by a British historian and then, about a week later, they were proven to be forgeries. Forensic testing proved the ink to be new, the paper was wrong and the handwriting itself was not accurate. There were also historical inaccuracies included in the works which helped send the forger to jail. The magazine, however, was forced to issue an embarrassing retraction for their overzealous mistake.
2. A ’90s Scammer Sold $50 Clothesline as Solar Powered Clothes Dryers
Sometimes a scam can still be technically legit, just in a way that pleases no one except the guy making all the money. That was the case with Steve Comisar, who sold solar powered clothes dryers through classified ads in the ’90s that only cost customers $50. He made $2 million before he was shut down.
So what was the scam? Comisar mailed everyone who paid him a length of clothesline. A scientifically proven way to use solar power to dry clothes. Needless to say, his customers were angry, but they were not “technically” ripped off. He kept the money, he just wasn’t allowed to sell any more.
Comisar would later go on to bigger and more complex scams and was apparently once known as the Jeffrey Dahmer of fraud.
1. Walmart Sold Fake Craft Beer
Craft beer has been around for quite a while but really gained some popularity in the 2010s. Plenty of companies with goofy names came out of the woodwork to sell traditional and non-traditional craft beers alike, and they were cutting into the market for some of the bigger breweries. In an effort to capitalize on this, Walmart started selling its own craft beer. Except it was a fake.
Walmart’s beer was supposedly made by Trouble Brewery, only they didn’t really exist. The beer was actually brewed by WX Brands, which is actually Genesee Brewing, a Costa Rican brewery known for the Genesee brand of cheap college beers. So, in reality, their craft beer was just mass market beer that had been mislabeled, which is technically not allowed.
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