Dot-com bubble - Financial definition
Concise definition of the term dot-com bubble
The dot-com bubble was a period of excessive speculation in the late 1990s when many internet-based companies saw their stock prices soar despite lacking substantial revenue or profit. This bubble burst in 2000, leading to significant financial losses and market downturns.
Comprehensive definition of the term dot-com bubble
The dot-com bubble emerged in the late 1990s during a surge in internet-related businesses. Investors poured massive amounts of capital into tech startups, often valuing them based on potential rather than actual performance. Companies like Pets.com and Webvan went public with high valuations but failed to achieve sustainable business models. The bubble burst in 2000, causing the NASDAQ Composite to plummet and leading to the collapse of numerous tech companies.
This period highlighted the risks of speculative investing and the importance of fundamental financial metrics. The aftermath also led to increased regulatory scrutiny and changes in market practices to prevent similar occurrences.