The dot-com bubble bursts

Date

March 2000

Category

Economy & trade

Region

United States

Era

Contemporary

Significance

On 10 March 2000 the technology-heavy NASDAQ Composite index peaked at 5,048, the climax of a speculative boom in internet and technology stocks that had seen the index rise roughly sixfold since 1995.

Investors had poured money into 'dot-com' start-ups, many with little revenue and no profits, on the expectation that the internet would generate vast future returns. Days after the peak, sentiment reversed and a prolonged sell-off began; by October 2002 the NASDAQ had fallen about 78 per cent from its high, erasing trillions of dollars in paper wealth. Numerous heavily promoted companies, such as Pets.com and eToys, collapsed into bankruptcy, and venture funding for unproven internet ventures dried up. The crash exposed the dangers of valuations detached from fundamentals and inflicted heavy losses on investors and employees. Yet it also cleared away weaker businesses while stronger survivors, including Amazon and eBay, endured and matured. The episode became a defining cautionary tale about financial bubbles and shaped a more disciplined, though still cyclical, approach to technology investment in the decade that followed.

Related economy & trade events

• Amazon launches, pioneering large-scale e-commerce
  16 July 1995
• Apple's App Store launches the app economy
  10 July 2008
• The global financial crisis and the collapse of Lehman Brothers
  15 September 2008
• China's Reform and Opening-Up Begins Under Deng Xiaoping
  December 18, 1978
• China joins the World Trade Organization
  11 December 2001
• Launch of the euro
  1 January 1999 (notes & coins 2002)

Further reading

The Silk Roads: A New History of the World

The wider story

The Silk Roads: A New History of the World

Peter Frankopan

Best-selling world history told through the trade routes that moved goods, faiths and ideas.

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