Dot-Com Crash Research Paper by CalDR

Dot-Com Crash
This paper examines some of the factors that caused the dot-com crash.
# 29453 | 10,420 words | 26 sources | MLA | 2002 | US
Published on Jul 30, 2003 in Economics (Macro) , Computer and Technology (Internet)

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This paper discusses how many believe the root cause of the dot-com crash was overvaluation of stock prices relative to the actual underlying value of the companies themselves. It explains that stocks of internet companies traded at Price-Earning ratios of higher then 30, buoyed by a speculative bubble. When reality set in for investors, many realized that the companies that they were so heavily invested in were little more then money sucking black holes with no upside potential in the near or long term future. It explains how this in turn triggered mass sell-offs of not only internet related stocks but soon impacted the market value of many companies associated with computer, network or telecommunications industries. This paper shows, in fact, that overvaluation was more a symptom of the speculative boom and was only one of the multi-faceted factors that contributed to the internet boom turning into the Internet bust.

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