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Hiral Jain

Content writer • 1y

Hey there, folks! Have you noticed how the stock prices of companies with an e-prefix or a .com at the end have been soaring? I'm referring to the infamous burst of the IT bubble in 2000. Information Technology (IT) bubble or Dot.Com bubble roughly covered the period 1997- 2000. During this period, many new Internet-based companies were started. The low interest rates in 1998-99 encouraged the start-up internet companies to borrow. Due to the rapid growth of the internet and seeing vast scope, venture capitalists invested huge amounts in these companies. Due to over-optimism, investors were less cautious. There was a great rise in their stock prices in the companies that they could cause their stock prices to increase by adding an "e-" prefix a ".com" to the end. Continued in the comment section 👇 Source CA FOUNDATION Business economics study material💀

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Replies (6)

Hiral Jain

Content writer • 1y

These companies offered their services/goods for free to grab consumers and charge high rates later. As a result, these companies saw high growth and a type of bubble developed. The "growth over profits" mentality led some companies to engage in lavish internal spending, which could not be sustained long and the bubble collapsed. Many companies ran out of capital and were acquired or liquidated. Stock markets crashed and slowly the economies began falling.

1 Reply

Shreyas Ramdasi

Mechanical Engineer • 1y

Hey yeah it's crazy how those e- and .com companies were all the rage back then It just shows how quickly investor sentiment can drive up stock prices sometimes beyond reason.

1 Reply

Sairaj Kadam

Entrepreneur • 1y

Investing a lot during the dot-com bubble seemed like a daring move that paid off for many investors. The movie "The Big Short" really captures this time, showing how exciting it was but also how it all fell apart in the end. Some people made billions, but a lot of folks ignored the big risks involved because they were so caught up in the excitement. This whole period is a reminder that when markets get crazy, it's crucial to stick to simple and sensible financial rules. (As always as, I as say Basic and logical)

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