"The Great Internet Money Game How America's top financial firms reaped billions from the Net boom, while investors got burned

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The rapid growth seemed to take its toll on operations. Several goods had the wrong product codes, so, for example, one flavor of dog food would be shipped instead of the proper one. Customer-service reps would routinely let the customer keep the wrong product and reship a new bag, according to Byron Gordon, a one-time supervisor in the department. "It could take weeks or even months [to fix the product codes]," he says. Pets.com lost $61.8 million in 1999 on revenues of $5.8 million.

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All this didn't stop Hummer Winblad and Merrill Lynch from taking the company public in February, 2000. Blodget put his first buy recommendation on the stock in March, then reiterated his recommendation three more times before he finally downgraded the stock to accumulate in August. The stock, which had gone public at $11 a share, was then at $1.31. "