Description
Dotcom Bubble Explained
DOT
COM BUBBLE
FLOW OF PRESENTATION
?
Dot Com Bubble AND Internet Boom Effect on stock market Free spending The bubble Effects of .com bubble
?
?
?
?
THE BOOM(BUBBLE GROWTH)
Venture capitalists saw record-setting growth ? Rises in their stock prices and therefore moved faster and with less caution ? Low interest rates in 1998–99 helped increase the start-up capital amounts ? New entrepreneurs had realistic plans and administrative ability ? Able to sell their ideas to investors ? The motto "get big fast“ ? Loss period the companies relied on venture capital and especially initial public offerings
?
EFFECT ON STOCK MARKET
Fast increase in value ? Noticed the raise in value for future ? Trading of shares done in large number ? Become grossly overvalued ? Undervalue of shares ? Companies had the same business plan ? American news media, encouraged the public to invest in risky companies
?
FREE SPENDING
IT company survival depend on it’s customer base (Ex :Google and Amazon) ? "Get large or get lost" was the wisdom ? At the boom IT raised there money from IPO. ? Company's lifespan was measured by its burn rate. ? Advertisement to create strong customer base ? “Growth over profits" is the final aim ? New Economy- Lavish Spending ? Executive and employee’s are paid on share basis
?
THE BUBBLE BURST
Friday, March 10, 2000 ? Increased interest rates six times = Economy going down ? Loss of share price ? Lost more than 10 percent from its peak ? IT amount to 8% of the stock in US market ? By 2001 the bubble was deflating at full speed ? Majority of the dot-coms ceased trading after burning through their venture capital ? No “Net Profit” ? Investors removed capital from IT industry
?
NASDAQ Composite index
Source:Marketreader.com
EFECTS OF .COM BUBBLE
? ? ? ? ? ? ? ? ?
Several communication companies goes to bankruptcy Worldcom found illegal account practicing Several companies and their executives were accused or convicted of fraud for misusing shareholders' money U.S. Securities and Exchange Commission fined some top investment firms 9/11 attack Supporting industries were scaled down as demand failed Some firms are survived like Amazon.com and ebay Google became industry-dominating mega firm 50% companies are survive till 2004 but at 2007 major fall in market
LIST OF COMPANIES
? ? ? ? ? ? ? ?
?
? ? ? ? ? ? ? ?
Boo.com, Startups.com Digital Corporation (EDIG) Freeinternet.com GeoCities theGlobe.com GovWorks.com pets.com Hotmail open.com InfoSpace lastminute.com The Learning Company Think Tools AG Webvan WorldCom Xcelera.com
THANK YOU…..
doc_421674148.pptx
Dotcom Bubble Explained
DOT
COM BUBBLE
FLOW OF PRESENTATION
?
Dot Com Bubble AND Internet Boom Effect on stock market Free spending The bubble Effects of .com bubble
?
?
?
?
THE BOOM(BUBBLE GROWTH)
Venture capitalists saw record-setting growth ? Rises in their stock prices and therefore moved faster and with less caution ? Low interest rates in 1998–99 helped increase the start-up capital amounts ? New entrepreneurs had realistic plans and administrative ability ? Able to sell their ideas to investors ? The motto "get big fast“ ? Loss period the companies relied on venture capital and especially initial public offerings
?
EFFECT ON STOCK MARKET
Fast increase in value ? Noticed the raise in value for future ? Trading of shares done in large number ? Become grossly overvalued ? Undervalue of shares ? Companies had the same business plan ? American news media, encouraged the public to invest in risky companies
?
FREE SPENDING
IT company survival depend on it’s customer base (Ex :Google and Amazon) ? "Get large or get lost" was the wisdom ? At the boom IT raised there money from IPO. ? Company's lifespan was measured by its burn rate. ? Advertisement to create strong customer base ? “Growth over profits" is the final aim ? New Economy- Lavish Spending ? Executive and employee’s are paid on share basis
?
THE BUBBLE BURST
Friday, March 10, 2000 ? Increased interest rates six times = Economy going down ? Loss of share price ? Lost more than 10 percent from its peak ? IT amount to 8% of the stock in US market ? By 2001 the bubble was deflating at full speed ? Majority of the dot-coms ceased trading after burning through their venture capital ? No “Net Profit” ? Investors removed capital from IT industry
?
NASDAQ Composite index
Source:Marketreader.com
EFECTS OF .COM BUBBLE
? ? ? ? ? ? ? ? ?
Several communication companies goes to bankruptcy Worldcom found illegal account practicing Several companies and their executives were accused or convicted of fraud for misusing shareholders' money U.S. Securities and Exchange Commission fined some top investment firms 9/11 attack Supporting industries were scaled down as demand failed Some firms are survived like Amazon.com and ebay Google became industry-dominating mega firm 50% companies are survive till 2004 but at 2007 major fall in market
LIST OF COMPANIES
? ? ? ? ? ? ? ?
?
? ? ? ? ? ? ? ?
Boo.com, Startups.com Digital Corporation (EDIG) Freeinternet.com GeoCities theGlobe.com GovWorks.com pets.com Hotmail open.com InfoSpace lastminute.com The Learning Company Think Tools AG Webvan WorldCom Xcelera.com
THANK YOU…..
doc_421674148.pptx