The rise and fall of Beanie Babies, which made Ty Warner a billionaire but now are nearly worthless

• Beanie Babies were the hottest toys in the world in the late 1990s.
• Ty Warner's knack for manipulating the market led to a trading frenzy in which $5 toys resold for thousands of dollars.
• Ty Inc. is still the largest plush manufacturer in the world, but now its attention has shifted to other products.

Ty Warner founded Ty Inc. in 1986 with the dream of creating a stuffed animal kids could afford.

At just $5, Beanie Babies hit the shelves in 1993 and soon became a cult favorite - not only because of their cute factor, but also their supposed high resale value.

The plush toys were largely successful because Warner knew how to control supply and demand. By creating variations and even halting production of some animals altogether, Warner laid the groundwork for a market of rare collectibles. Fans would go on scavenger hunts hoping to be one of the lucky few to snag the latest shipments. To add to the exclusivity, Warner refused to sell his product in chains like Toys R Us and Walmart.

The craze only grew with the invention of the internet. Adults began compulsively buying Beanie Babies in anticipation of them reselling for thousands of dollars on the secondary market. In 1997, eBay had auctioned off $500 million worth of the plush toys, accounting for more than 6% of the site's total sales. And the following year, Ty's sales surpassed $1 billion for the first time.

In 1999, Warner sensed the fad was dying out and announced he would stop producing Beanie Babies on the eve of the new millennium. By then, the plush animals had become ubiquitous, and kids were beginning to turn their attention to the next must-haves, like Furby and Pokemon.

But some believe it wasn't the Beanie Babies that decreased in popularity - it was the interest in trading them. Watch the above video to track the meteoric rise and abrupt fall of an iconic '90s fad.