On March 10, 2000, with the NASDAQ peaking up with maximum 5,132.52 in intra-day trading and world faced its first dot com bubble. So, what happen ? where every body goes wrong ? how come any body didn’t have any fucking clue about this. Or it’s just greed that fooled Silicon Valley.
In its most effective way DOT-COM fucked us from 2000–2002 and give NASDAQ a crazy ride from 5046.86 to 1114.11 and made him lose 78% of its value.
So, what DOT COM bubble term means by its definition(in a boring way) ? The dot-com bubble occurred in the late 1990s and was characterized by a rapid rise in equity markets fueled by investments in Internet-based companies. During the dot-com bubble, the value of equity markets grew exponentially, with the technology-dominated NASDAQ index rising from under 1,000 to more than 5,000 between 1995 and 2000. ( I didn’t understand this definition as well. you are not alone;) )
Let’s start dot-com story from the beginning. A long time ago in a Silicon Valley far, far away in 1960…. There was U.S. military division who vastly underestimated how much people would want to be on-line and developed ARPANET(which would become the first network to use the Internet Protocol). In the 1980s, the work of British computer scientist Tim Berners-Lee on the World Wide Web theorized protocols linking hypertext documents into a working system, marking the beginning of the modern Internet. Commercially the Internet started to catch on in 1995 with an estimated 18 million users(in 2016 is 3 billion). The rise in usage meant an untapped market — an international market. Soon, speculators were barely able to control their excitement over the “new economy.”
Companies underwent a similar phenomenon to the one that gripped Seventeenth century England and America in the early eighties: investors wanted big ideas more than a solid business plan. Buzzwords like networking, new paradigm, information technologies, Internet, consumer-driven navigation, tailored web experience, and many more examples of empty double-speak filled the media and investors with a rabid hunger for more. The IPOs of Internet companies emerged with ferocity and frequency, sweeping the nation up in euphoria. Investors were blindly grabbing every new issue without even looking at a business plan to find out, for example, how long the company would take before making a profit, if ever. Following is list of the most fucked up shows.
- Pets.com:-
The Pets.com sock puppet has become synonymous with the dot.com bust. The pet food and supplies company is perhaps the most recognized flop from the dot.com bubble because of its famous marketing campaign. Pets.com ran ads of a dog sock puppet interviewing people on the street.
2. Webvan.com
If Pets.com is the dot.com bust’s most famous flop, Webvan was its biggest. Like many victims of the bubble, the grocery delivery service grew too fast, expanding its services to eight cities in just a year and a half. In the summer of 1999, Webvan announced it was making a $1 billion investment in warehouses and would expand to 26 more cities by 2001.
3. eToys.com
When eToys.com shares hit a high of $84.35 in October 1999, who could have guessed that just 16 months later, the company would warn investors that its stock was “worthless?”
4. GeoCities
Not all of the dot.com busts disappeared right away. In fact, GeoCities lasted until last October. The Web hosting service gave many Internet users their first Web sites. With 19 million unique visitors per month, GeoCities was the third-most visited site on the Web behind AOL and Yahoo in 1998.
5. theGlobe.com
TheGlobe.com isn’t remembered for becoming one of the first social media sites way back in 1995 as much as it’s remembered for its record-setting initial public offering. When theGlobe.com went public on November 13, 1998, its stock jumped a then-record 600% in its first day of trading. The company set the offer price at $9 a share, but the stock opened at $87. Shares of theGlobe.com rose to a high of $97 during its first day of trading before closing at $63.50.
6. boo.com
Boo.com was a European company founded in 1998. The company spent $135 million of venture capital in just 18 months,[1] and it was placed into receivership on 18 May 2000 and liquidated. In June 2008, CNET hailed Boo.com as one of the greatest dot-com busts in history.
The first shots through this bubble came from the companies themselves: many reported huge losses and some folded outright within months of their offering. Siliconaires were moving out of $4 million estates and back to the room above their parents’ garage. In the year 1999, there were 457 IPOs, most of which were Internet and technology related. Of those 457 IPOs, 117 doubled in price on the first day of trading. In 2001 the number of IPOs dwindled to 76, and none of them doubled on the first day of trading.
Some companies also managed to survived from this chaos like amazon.com, ebay.com, Priceline.com, Shutterfly, Coupons.com. And some companies were just look same like as were in 1999. Tell me if i’m wrong;).
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The Bottom Line
In the mid to late 1990s the Internet was a relatively new animal, and the businesses that sprung to life did so with ambition, hope and, at times, shaky business plans. While many of the companies experienced huge and rapid growth — its owners becoming instant millionaires — a significant proportion crashed and burned just as quickly. Some companies were able to adapt through reorganization, new leadership and redefined business plans, making them the survivors of the dot-com bubble.
(To Be Continued…)
Thanks for reading. Feedbacks and comments are always appreciated.
Cheers,
Maulik