This Day In Market History: iOmega's Incredible Run Comes To An End

Each day, Benzinga takes a look back at a notable market-related moment that occurred on this date.

What Happened?

On this day 23 years ago, iOmega Corp. hit $27 per share, a gain of 2,135 percent over a one-year stretch.

Where The Market Was

The Dow finished the day at 5,778. The S&P 500 traded at 678.42. Today, the Dow is trading at 25,877 and the S&P 500 is trading at 2,864.

What Else Was Going On In The World?

In 1996, Prince Charles and Diana, Princess of Wales finalized their divorce. Nintendo NTDOY released the Nintendo 64 gaming system in Japan. The average price of a new house in the U.S. was $118,200.

Dot Com Bubble Foreshadowing

IOmega isn't usually one of the names investors associate with the Dot Com bubble of the late 1990s, but the stock was one of the first dramatic examples of the impact that dramatic internet-fueled buying enthusiasm could have on the market.

At the time, iOmega produced Zip disk drives that offered a major upgrade in portable data storage capacity. The first Zip drives held 100 MB of data compared to a maximum capacity of only 1.44 MB for floppy disks at the time.

In one year’s time, iOmega stock skyrocketed more than 2,000 percent, driven by investors hyping the stock on online bulletin boards and in chat rooms. Unfortunately, the iOmega bubble soon burst, and the stock had plummeted 68.1 percent by May 22, 1997.

IOmega was eventually acquired by EMC Corporation in 2008.

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Image credit: KMJ [GFDL], via Wikimedia Commons