Each day, Benzinga takes a look back at a notable market-related moment that happened on this date.
On this day in 2003, AOL and Time Warner Inc TWX, which had merged in 2000, announced the largest annual loss of any public company in history.
Where Was The Market?
The S&P 500 was trading at 844.61 and the Dow Jones Industrial Average was at 7,945.13.
What Else Was Going On In The World?
In 2003, the Human Genome Project, which began in 1990, completes its mission of successfully sequencing roughly 99 percent of the human genome. In the U.S., the Department of Homeland Security is launched. A 120 GB hard drive cost $97.
The Biggest Loser
The AOL-Time Warner merger is widely considered to be the worst corporate mergers in history. On Jan. 30, 2003, that fact became painfully obvious when the company reported a full-year fiscal 2002 net loss of $98.7 billion, the largest annual loss of any company in history. Just two years after the two companies announced the $160 billion merger, AOL-Time Warner was forced to take a $99-billion goodwill write-off after the dot-com bust and AOL’s advertising business ran out of gas.
AOL’s market cap plummeted from $226 billion to roughly $20 billion and subscribers were leaving in droves. AOL had long been the king of dial-up internet, but was struggling to adapt to the broadband revolution. Time Warner finally decided to spin off AOL in 2009.
Ironically, 15 years later, Time Warner is in the process of another massive $85-billion merger with telecom giant AT&T Inc. T.
Image Credit: Flickr user Matt Grimm.
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