In the late 1990s, there was a period of rapid growth in the technology industry, and many new internet companies were created. Investors were very excited about these companies and believed they would become extremely valuable in the future. People started investing a ton of money in these companies, even if they didn’t have a proven business model or weren’t making any profits.
This led to a lot of speculation and hype around these companies, and their stock prices began to rise exponentially. Some companies even went public in initial public offerings (IPOs), and their stock prices soared even higher.
However, the bubble burst in 2000, as investors began to realize that many of these companies were not making any profits, and their stock prices were based on hype and speculation rather than sound financial fundamentals. Many companies went bankrupt, and their stock prices plummeted. This caused a lot of people to lose a lot of money, and it had a ripple effect on the broader economy.
The dot com bubble crash was a lesson in the dangers of speculation and investing in companies without a proven business model or sound financial fundamentals. It showed that it’s important to do your research and invest wisely, rather than following hype and speculation. As Warren Buffet wisely said, “be fearful when others are greedy, and greedy when others are fearful.”
Check out this list of companies that flopped during this time.