Egghead Software

The company was founded by Victor D. Alhadeff in 1984, as a single store in Bellevue, Washington.[1]

Customers were able to sign up for a "CUE" card ("Customer Updates and 'Eggs'tras") that would provide discounts.[2]

By June 1987, when Alhadeff was 40 years old, the company had 50 stores on the West Coast of the United States.[3]

In June 1988, the company became a public company via an initial public offering. Within a year, the stock price dropped from $17 per share to $11 per share and top executives, including the founder, were sued for fraud for failing to disclose material facts about the true condition of the company`s inventory systems and finances.[4]

By December 1989, the company had 206 stores, but closed 20 of them due to losses and inventory issues and theft.[5]

In June 1993, the company released its first software product, Egghead Express, which allowed customers to place and manage orders.[6]

In 1995, the company moved its headquarters from Issaquah, Washington, east of Seattle, to Spokane. At that time it had 2,500 employees and operated retail stores in 30 states.[7]

Also in 1995, when the development manager of Windows 95 wanted to test compatibility, he bought a copy of every program for sale at an Egghead store.[8]

In 1996, George Orban became chairman and in January 1997, he became CEO.[9]

In May 1996, Egghead sold its Corporate, Government & Education division to Software Spectrum for $45 million.[10][11][12] At that time, the stock price was $6 per share and there was speculation of a takeover of the company.[13]

In February 1997, the company announced it would close 77 of its 156 stores and reported additional losses.[14]

In May 1997, the company acquired competitor Surplus Software Inc. for $31.5 million.[15]

In January 1998, the company reported a loss and announced it will close all 80 of its remaining stores, layoff 600 of its 800 employees, and sell only through its website, Egghead.com. Its stock price fell 18% on the news.[16][7][1]

In July 1998, during the dot-com bubble, shares soared to $25 as investors bought up shares of internet companies.[17]

In 1999, the company merged with OnSale.com in a $375 million all-stock transaction. The company kept the Egghead.com name and the CEO of Onsale, Jerry Kaplan, became CEO of the combined company.[18][19][20]

In December 2000, right before Christmas, the company's servers were compromised, and it feared that the credit card data of over 3.7 million people was stolen.[21][22] The company first publicly denied that there was a problem, then notified Visa Inc., which notified banks, who notified consumers, causing the breach to escalate into a full blown scandal.[23][24] Many credit cards were cancelled.[25] The company later discovered that credit card information was not obtained.[26]

In August 2001, the company filed bankruptcy and worked out a deal to be acquired by Fry's Electronics.[27] However, the deal fell apart after Fry's accused Egghead of failing to provide financial documents, and in December 2001, the company sold its domain name to Amazon.com.[28]