This is a sceptical history of the internet/stock market boom. John Cassidy argues that what we have just witnessed wasn't simply a stock market bubble; it was a social and cultural phenomenon driven by broad historical forces. Cassidy explains how these forces combined to produce the buying hysteria that drove the prices of loss-making companies into the stratosphere. Much has been made of Alan Greenspan's phrase irrational exuberance, but Cassidy shows that there was nothing irrational about what happened. The people involved - fund managers, stock analysts, journalists and pundits - were simply acting in their own self-interest.

An analysis of the inflated business potential of the Internet.

Seminar paper from the year 2012 in the subject Business economics - Banking, Stock Exchanges, Insurance, Accounting, grade: 1,3, Technical University of Applied Sciences Mittelhessen, language: English, abstract: The Dotcom bubble, also known as the ‘Internet bubble’ or the ‘Information technology bubble’ was a speculative bubble of stock prices of mainly American Internet companies during the time from 1995 until 2000 when many investors believed that a ‘new era’ was upon them. In only two years, the Internet sector grew over 1000% of its public equity and equalled nearly 6% of the market capitalization of the United States and over 20% of all public traded equity volume in the US. It had its peak on March 10, 2000 with a NASDAQ score of 5,048.62. This period was characterized by lots of establishments of companies in the Internet sector. They were called ‘Dotcom Companies’ because of the ‘.com’ in the end of an URL that comes from the word ‘commercial’. The bubble burst during the years 2000 until 2002 when the NASDAQ lost nearly 80% of its value, many companies like Pets.com failed completely and over $7 trillion in market value were destroyed. With this paper, the author tries to explain the rise and fall of Internet stock prices during that period. For this purpose, the general causes and characteristics of financial bubbles get described before the application to the Dotcom bubble follows. Additionally, some company examples and survivors and losers of the bubble like pets.com, Webvan or Ebay get introduced. Because the bubble mainly took place in the United States, the author will focus on American company examples and the American stock exchange.

Using a broad media database, the informational environment surrounding the technology market highs is analyzed for a trigger event that could have caused the quot;Internet bubblequot; to burst. Two major informational events are identified as triggers for the sudden change in market sentiment: a joint statement by Bill Clinton and Tony Blair on free access to human genome research results and the publication of a study by Barron's magazine about Internet companies' burn rates. Evidence of the considerable short-term market impact on Internet stocks is given. Moreover, diffusion data of the informational events show a long-term impact of the Barron's study on media, financial analyst, and consequently on investor focus of attention.

Possibly. We empirically examine the plausibility of rational models designed to explain stock price bubbles associated with technological revolutions such as the internet. Our innovation is to examine the volatility patterns of old economy (brick and mortar) firms that adopted the internet as a medium of commerce (e-Commerce). During the bubble, there is an increase in idiosyncratic risk for firms adopting the technology while post-crash, there is an increase in systematic risk for the same technology adoption by firms both in the stock and options markets. We find some quantitative evidence that the weight of the e-Commerce business to justify the median firm's volatility increase in the bubble period, is borne out five years later with the actual sales data. Overall we conclude that our evidence is consistent with rationality and that both rational and behavioral approaches must provide quantitative predictions in order to have a sharper face off and to better understand asset price bubbles.

The Internet stock bubble wasn't just about goggle-eyed day traderstrying to get rich on the Nasdaq and goateed twenty-five-year-olds playing wannabe Bill Gates. It was also about an America that believed it had discovered the secret of eternal prosperity: it said something about all of us, and what we thought about ourselves, as the twenty-first century dawned. John Cassidy's Dot.con brings this tumultuous episode to life. Moving from the Cold War Pentagon to Silicon Valley to Wall Street and into the homes of millions of Americans, Cassidy tells the story of the great boom and bust in an authoritative and entertaining narrative. Featuring all the iconic figures of the Internet era -- Marc Andreessen, Jeff Bezos, Steve Case, Alan Greenspan, and many others -- and with a new Afterword on the aftermath of the bust, Dot.con is a panoramic and stirring account of human greed and gullibility.

This book critically examines the role of the venture capitalists, investment banks and the Federal Reserve in the evolution of the internet "bubble". It also looks at what new companies and managers need to do to avoid the consequences of such "irrational exuberance" in the future.

There are only two types of stocks: those safe from bubbles and those that are not. This is a fact of investing many discovered as they saw their fabulous gains whittled away by the extreme calamity of the Internet sector. But what about the future? Is there a way for investors to capture the enormous potential for profit that exists at the frontier of the economy, the place where innovation and genius operate, without placing their fortunes in jeopardy? Is there a way to evaluate price increases—and declines—and identify whether they are happening for good or bad reasons? Bubbleology makes it possible to separate the winners from the losers. It is a brilliant, practical, and original analysis of the stock market that bashes the conventional wisdom about bubbles, showing that such famous examples as Tulipomania were not, in fact, bubbles at all. Bubbleology shows that the traditional way of evaluating risk—equating it with volatility—is inherently flawed and incomplete. If a stock fluctuates a lot in price it is regarded as risky. If the price is stable, then it is not. What this simplistic way of thinking leaves out is the simple fact that companies trying something completely new that may fundamentally alter the economic landscape are operating at the frontier. The stock of such a company swims in a sea of ambiguity, its circumstances uncertain, since there is little to provide guidance about the future. But when nobody knows for sure what will happen, pundits tell us again about Tulipomania, the South Seas Bubble, and now the debacle of the Internet to scare investors away from potentially enormous profits. To realize those profits, however, investors have to understand the role that uncertainty and ambiguity—the absence of reliable information about future events—play in the modern stock market. Those who equate ambiguity with bubbles will miss the great opportunities of the future. Bubbleology provides a new way to observe what is really going on in the market, enabling you to understand whether a stock or a sector is suspicious—whether it is in a bubble and therefore something to be avoided. Finding bubbles requires knowing where to look and what to look for. Bubbleology will help you avoid both streaming into speculative manias and shying away from perfectly good business opportunities. It tells you why you need to avoid both pontificating pundits and overconfident stock analysts. With this unique and forward-thinking book, you can inspect suspicious stocks, accurately discern risk, and diagnose a blossoming bubble before it vanishes along with your money.