The dot com crash of 2000 essay

Software companies generated profits by selling licensed software, which costs very little to reproduce. Communication providers, convinced that the future economy would require ubiquitous broadband access, went deeply into debt to improve their networks with high-speed equipment and fiber optic cables.

Investors soon realized that the dot-com dream had devolved into a classic speculative bubble. Most of those firms were operating under loses and no tangible assets to warrant those prices.

Dot com bubble ppt

It brought upon millions upon millions of dollars in losses and many of these start up companies never even made a profit. Savings and Loan Crisis - A detailed essay on an important event in the history of the Federal Reserve.. Discussion 4. It suggests that investors should pay a premium for earnings of a growth firms relative to mature firms due to the presence of profitability multiplier in growth firms. Personal computers remain as lousy and confusing as they were a decade ago. April 6, admin 0 Comment Dot. None of these articles gave the Internet a mention. The public market should make a proper valuation of the companies which want to do an IPO, because that will effect on all intermediaries. Given the point of view of one of the largest stock markets - the market of the United States of America - the phenomenon is first of all presented as deriving from behaviours related to stockholding Are their incentives aligned properly with their intended role? One of the more significant players, WorldCom, was found practicing illegal accounting practices to exaggerate its profits on a yearly basis. However, he was quickly bored of his legal job, and left his position to become the General Counsel of ShoeDazzle, a startup created by Brian Lee and Kim Kardashian You never know what to expect especially when you see, "Rotten dot com collects images and information from many sources to present the viewer with a truly unpleasant experience" on the main page.

My view is that, economic bubbles are part of the capitalist market, as the market is always going through cycles. Those with comparative advantage over the competition tend to invest more in the growth stage to expand their operations.

dot com bubble graph

For some, the dotcom era saw an amassing of great wealth. Structural factors include investor expectations and the feedback theory of bubbles.

When the dot com bubble began

Conclusion I believe that in a well-functioning system, with the incentives of intermediaries fully aligned in accordance with their fiduciary responsibility, public markets will correctly value companies such that investors earn a normal required rate of return. Secondly, communication by entrepreneurs to investors is not completely credible because investors know entrepreneurs have an incentive to inflate the value idea. This approach suggests that the presence of growth opportunities to invest new capital results to projects with a promising rate of rate return higher than normal. The relevance of the issue is discussed through the perspective of the theories of finance with special regard to the Model Portfolio Theory. Some later recovered and surpassed their dot-com-bubble peaks, e. Hundreds of stocks such as Pet. We will write a custom essay sample on Dot. You never know what to expect especially when you see, "Rotten dot com collects images and information from many sources to present the viewer with a truly unpleasant experience" on the main page.

They filed bankruptcy. Business applications were invented to help users with a variety of tasks from accounting to tax preparation to word processing. By the late s, even some tech company secretaries had option portfolios valued in the millions, while several companies offered BMWs as a sign-on bonus for new employees!

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how was the dot com bubble created

Amazon was spending on expanding customer base and alerting people to its existence and Google was busy spending on creating more powerful machine capacity to serve its expanding search engine.

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The Dot Com Bubble Essay Example