2. 1. What is "Dot-com Bubble"?
● "Dot-com" or ".com": Refer to Internet-based
companies.
● "economic bubble" : A trade in products or assets with
inflated value.
● Dot-com bubble:
○ A economic bubble occurring roughly 1997-2000
○ Cause: The expectation on dot-com companies
increased, making the stock price on Internet sector
rise rapidly.
3. Context
● The explosive of Internet on the 1990s years
○ The advent of the World Wide Web(www)
○ The appearance of Mosaic web browser in 1993
-> Venture capitalist invested on the Internet companies.
-> The stock of these company is increased unusual.
4. Movement: Bubble growth
● Dot-com companies decide to moved faster when it see
the growth in their stock price.
● Provided products, services freely.
● The common motto of their companies:
"Get big fast"
5. Soaring stock
● Stock market bubble: a self-perpetuating rise in the
prices of stocks of a particular industry
-It is mainly caused by speculators
-> many companies became grossly overvalued.
6. Free spending
● dot-com theory: A Internet company survived base on
the number of customer they had.
● The advent of "New Silicon Valley" became popular.
● Too much money was spent for developing new
technologies like 3G in Europe
-> Lead almost dot-com companies to huge debt
7. Bubble burst
● Friday, March 10, 2000 NASDAQ peaks at 5048.62.
● April 4, fell from 4283 points to 3689 points
● March 20, 2000 : NASDAQ lost 10 percents from each
peak
● By 2001, the bubble is deflating at full speed.
8. Aftermath
● There are many communication companies were forced
to file for bankruptcy:
○ Worldcom, NorthPoint Communication
○ Global Crossing, XO Communication
● $5 trillion is lost in the stock market crash of 200-2002
● Computer-related program in the university drop in the
early 2000s years.
