We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.
Nobody downloaded yet

The Internet Bubble - Research Paper Example

Comments (0) Cite this document
Summary
The internet bubble, also known as the Dotcom bubble or the IT bubble, refers to a speculative bubble concerning the stock prices of predominantly American internet companies spanning the period from 1995 to 2000


Download full paper
GRAB THE BEST PAPER
The Internet Bubble
Read TextPreview

Extract of sample
The Internet Bubble

Download file to see previous pages... During this period, investors believed that a new era had begun with the internet sector seeing a 1000% growth in only two years, which equaled nearly 6% of the US’ market capitalization and more than 20% of equity volume traded publicly in the US. The bubble hit its peak in early 2000 with a score of 5,048.62 on NASDAQ (Kraay & Ventura, 2011). During this period, the sector saw increased establishment of internet companies that were referred to as Dotcom companies, taken from the suffix at the end of their URL. This bubble burst between the years 2000 and 2002 as NASDAQ saw a loss in value of over 80% with companies, for instance Pets.com, failing completely with more than $7 trillion destroyed in market value (Kraay & Ventura, 2011). This paper seeks to detail what happened during this period, why it transpired, the way it could have been prevented, as well as the main players in the internet bubble.The internet was responsible for creating a euphoric attitude in the 90s, inspiring hopes for the internet as online commerce’s future. This led to the formation of many dotcom companies hoping that they would be worth millions. However, most of these companies were not very successful as those that were overvalued (Perkins & Perkins, 2009). This resulted in these companies crashing, leaving significant losses to be handled by the investors. The collapse, in fact, precipitated the stock market crash of 2001 more than 9/11 did, costing investors $5 trillion. The mid to late 90s saw unrealistic expectations from the public regarding what the internet had to offer. Internet entrepreneurs invested in the hope of becoming internet billionaires, inspiring companies like Kozmo, eBay, and Amazon. However, for every internet company that became a success, hundreds of others collapsed. Most investors ignored fundamental rules of the stock market such as the analysis of P/E ratio, reviewing business plans, and the study of market plans (Perkins & Perkins, 2009). They, instead, became pre-occupied with ideas that had no proven potential in the market. Factors that Led to the Internet Bubble Burst Two basic factors contributed to this phenomenon. The first was the utilization of metrics that were ignorant of cash flow. Most analysts laid emphasis on aspects of individual entrepreneurship that were not concerned with how to generate cash flow or revenue. One theory contends that the bubble burst due to the investors’ pre-occupation with what was referred to as the network theory, which stated that a network’s value increased exponentially. In addition, the number of nodes increased (Adams, 2009). While this made sense, it neglected the company’s ability utilizing the network for cash generation and making the investors a profit. Secondly, most of the internet company stocks were overvalued. On top of focusing metrics that were unnecessary, analysts made use of high multipliers in formulas and models in the valuation of the companies, resulting in overly optimistic and unrealistic values (Adams, 2009). While the conservative analysts were not in agreement, the recommendations they made were ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“The Internet Bubble Research Paper Example | Topics and Well Written Essays - 750 words”, n.d.)
Retrieved from https://studentshare.org/e-commerce/1467396-you-are-to-research-the-rise-and-fall-of-the-early
(The Internet Bubble Research Paper Example | Topics and Well Written Essays - 750 Words)
https://studentshare.org/e-commerce/1467396-you-are-to-research-the-rise-and-fall-of-the-early.
“The Internet Bubble Research Paper Example | Topics and Well Written Essays - 750 Words”, n.d. https://studentshare.org/e-commerce/1467396-you-are-to-research-the-rise-and-fall-of-the-early.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document
CHECK THESE SAMPLES - THEY ALSO FIT YOUR TOPIC
INTERNET
It is faster and reliable source of communication. Other types of communication like television, radio and telephone used internet for their communication. The concept of voice over internet protocol (VoIP) changed the concept of telephony and a similar concept of internet protocol television (IPTV) has carved the communication through television.
9 Pages(2250 words)Research Paper
The Housing Market Bubble Burst
The cost of housing or for that matter for any commodity solely depends upon the demand-supply dynamics if it is allowed to operate in a free market without any government intervention. Housing demand was on an upswing since January 1993. The median housing price, which was $125,000 in 1993, doubled up to $250,000 by 2006.
3 Pages(750 words)Research Paper
2006 New York Housing Market Bubble
2006 New York Housing Bubble Introduction A housing bubble can be said to be an economic bubble, which occurs in either local or worldwide real estate market. It is characterized by fast rises in the price of real property until untenable levels are approached or reached relating to incomes and other measures of affordability.
4 Pages(1000 words)Research Paper
Management Information Systems Project
The Dot.com bubble was an e-commerce with a specific feature and distinctive theme (Argenti & Barnes, 2009). This bubble was designed to mock the former bubble by the name web 2.0. The bubble in the dot.com website was a 1999 and also a 2000 bust in the media.
5 Pages(1250 words)Research Paper
Bubble Tea in Singapore
Ice merged types of the drinks, like the slushies, are as well offered, typically in fruit tastes. Pearl milk tea (PMT) is among the favorite types of bubble tea. This type is referred to as Boba milk tea in the United States of America. It comprises of small balls prepared by pearls that have tapioca starch.
3 Pages(750 words)Research Paper
The World Wide Web Bubble
A mix of the speedily increasing stock prices and the market confidence that the companies would be turning into future profits along with the broadly accessible venture capital resulted in the creation of an environment where many investors agreed to overlook the traditional metrics in support of their confidence in the technological advancements.
10 Pages(2500 words)Research Paper
How SOX (SarbanesOxley Act of 2002) affects corporate governance and what additional improvements need to be added to SOX to improve corporate governance
The goal of the act was the prevention and deterring of future accounting fraud, while protecting the shareholders and increasing the confidence of the public in company financial reporting and the U.S. capital markets. Presented
13 Pages(3250 words)Research Paper
Internet addiction
Statistics have indicated that 14% of the urban youths in china, which translates into 24 million kids show signs of internet addiction, while in the USA, approximately 7.5% of the youths are internet addicts (Brandt, ,
3 Pages(750 words)Research Paper
Internet
The major factor that led to the adoption of internet in various organizations and at all levels is the speed of communication and workflow. Earlier ordering stock quotes and requisitions would take as much as five to seven days in processing. Now with the
12 Pages(3000 words)Research Paper
The Leadership Experience in 21st Century
According to the authors Hanna, Hanna and Latchem, leadership means the act of leading or guiding people for the growth and development of the organization. Implementation of effective leadership style contributes in the fulfilment of goals and objectives of the firm. In the modern business, the processes of the companies are changing rapidly.
12 Pages(3000 words)Research Paper
Let us find you another Research Paper on topic The Internet Bubble for FREE!
Contact us:
+16312120006
Contact Us Now
FREE Mobile Apps:
  • About StudentShare
  • Testimonials
  • FAQ
  • Blog
  • Free Essays
  • New Essays
  • Essays
  • The Newest Essay Topics
  • Index samples by all dates
Join us:
Contact Us