Dot-com bubble
Also known as: dot-com boom · Internet bubble · Information Technology Bubble
The dot-com bubble was a stock market bubble that developed during the late 1990s and peaked on March 10, 2000.
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Historical context for the coining of the phrase
The term was coined during the height of the dot-com bubble to describe the speculative frenzy surrounding internet-based companies.
primary market index for dot-com stocks
The index was heavily weighted toward technology and internet companies, making its dramatic peak in March 2000 and subsequent crash the defining metric of the bubble's lifecycle.
primary exit strategy for dot-com investors
The frenzy to take companies public, often regardless of profitability, created a speculative cycle where IPOs were viewed as guaranteed wealth generators.
primary funding mechanism for dot-com startups
The influx of venture capital during the late 1990s provided the liquidity that allowed unprofitable internet companies to scale rapidly, directly inflating the market bubble.
symbolic failure of the dot-com era
This company became the quintessential example of the bubble's collapse, as its rapid rise and subsequent liquidation in 2000 highlighted the lack of sustainable business models among many internet startups.
central bank leader during the bubble
As Chair of the Federal Reserve, his monetary policy and public warnings were central to the economic environment that defined the bubble's growth and eventual correction.
modern era example of valuation disconnect
The late 1990s internet stock surge demonstrates how rapid technological adoption can lead to irrational exuberance and prices that ignore traditional fundamental valuation metrics.
contemporaneous corporate collapse
While not strictly a dot-com, the Enron scandal occurred in the same post-bubble climate and shared the same themes of market exuberance and systemic accounting failures.
major corporate accounting scandal during the bubble
The collapse of WorldCom, driven by massive accounting fraud, exemplified the corporate malfeasance that surfaced as the speculative bubble burst.
amplification mechanism for market losses
High levels of leverage used by investors and firms during the late 1990s exacerbated the speed and severity of the market crash when the bubble burst.
legislative catalyst for internet infrastructure investment
This act deregulated the telecommunications industry, leading to massive over-investment in fiber-optic infrastructure that became a core component of the dot-com speculative boom.
regulatory context for financial market behavior
The repeal of parts of this act in 1999 is often cited by economists as a factor that allowed for the increased risk-taking and speculative environment that fueled the bubble.