Dot‑Com Bubble
What It Is
The Dot‑Com Bubble (1995–2000) was a speculative boom in internet and technology stocks that ended in a sharp market crash.
Why It Matters
It demonstrated the dangers of speculative mania and overvaluation in emerging industries.
How It Happened
- Massive investment in unprofitable internet startups
- Easy capital raising through IPOs
- Irrational expectations for growth
- Valuations disconnected from fundamentals
Key Components
- Tech IPO surge
- Venture capital excess
- Speculative trading
- Market correction
Example
Companies like Pets.com raised millions despite weak business models and collapsed shortly after.
Key Takeaways
- Innovation can fuel bubbles.
- Valuations matter.
- Market corrections can be severe when speculation peaks.