The Dot-Com Bubble - Wall Street History

Patrick Boyle On Finance

Patrick Boyle

Investing, Business

4.9 • 320 Ratings

🗓️ 16 January 2021

⏱️ 25 minutes

🔗️ Recording | iTunes | RSS

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Summary

Send us a textThe Dot-Com bubble was one of the largest speculative bubbles in U.S. stock market history. Here's a quick history lesson on what it was like twenty years ago. The Dot-Com Bubble was a major economic event that ultimately led to a three year bear market. The Dot-Com Bubble started in the 1990s with a rapid wave of new internet companies going public by IPO. Many of these dot-com stocks while unprofitable, skyrocketed in value. In this video, we explain what caused the Dot-Com Bu...

Transcript

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0:00.0	Hello and welcome. You are listening to Patrick Boyle on Finance, a podcast exploring ideas from quantitative finance, examining events occurring in markets right now and financial history to see what lessons can be taken away, including interviews with some of the most interesting people in the world of finance. To learn more about the podcast, visit onfinance.org.
0:27.1	Welcome back to Patrick Boyle on finance. Today we're going to look at the dot-com bubble and the
0:32.3	lessons for today's hot tech sector. The dot-com bubble started in 1995 and it burst five years later in 2000.
0:40.3	Today in another technology boom, let's look back and try and understand how it was similar
0:46.3	and how it differs from what's happening today and if there's anything we can learn from the
0:51.3	mistakes of the past. The dot-com bubble was kick-started by the launch of Netscape, the first internet browser
0:58.0	that displayed images in line with text instead of in a separate window.
1:03.0	The software was free to all non-commercial users and was pushed out to the public
1:08.0	by internet service providers in computer magazines. The internet had just become accessible to the public by internet service providers in computer magazines.
1:11.6	The internet had just become accessible to the public and it was growing fast, way faster than radio or television had when they were new technologies.
1:22.6	In 1990, only 2.6 million people had access to the internet, and five years later, 45 million people
1:31.2	had internet access, and the number of people online was more than doubling every year. Something
1:37.2	very exciting was happening, and it was clear that the internet was going to fundamentally change
1:42.7	the way business was done in every
1:45.2	part of the economy.
1:47.0	NetScape went public in 1995.
1:50.2	Frank Quatron, the hottest tech banker of the 1990s, led the offering at Morgan Stanley.
1:56.5	He planned on offering the stock at $14 per share, but demand was so intense that in the days leading
2:03.0	up to the IPO, he made the controversial decision to raise the price three times, first
2:09.0	to $21, then $24 and finally to $28. In addition, he increased the number of shares
2:16.9	to be sold from $3.5 million to 5 million.
2:20.3	The stock more than doubled on its first day trading.
	...

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