what was the dotcom bubble 
the dotcom bubble was a rapid rise in u s technology stock equity valuations fueled by investments in internet based companies during the bull market in the late 1990s the value of equity markets grew exponentially during this period with the technology dominated nasdaq index rising from under 1 000 to more than 5 000 between the years 1995 and 2000 things started to change in 2000 and the bubble burst between 2001 and 2002 with equities entering a bear market 12the crash that followed saw the nasdaq index which rose five fold between 1995 and 2000 tumble from a peak of 5 048 62 on march 10 2000 to 1 139 90 on oct 4 2002 a 76 81 fall by the end of 2001 most dotcom stocks went bust even the share prices of blue chip technology stocks like cisco intel and oracle lost more than 80 of their value it would take 15 years for the nasdaq to regain its peak which it did on april 24 2015 13understanding the dotcom bubblethe dotcom bubble also known as the internet bubble grew out of a combination of the presence of speculative or fad based investing the abundance of venture capital funding for startups and the failure of dotcoms to turn a profit investors poured money into internet startups during the 1990s hoping they would one day become profitable many investors and venture capitalists abandoned a cautious approach for fear of not being able to cash in on the growing use of the internet with capital markets throwing money at the sector start ups were in a race to quickly get big companies without any proprietary technology abandoned fiscal responsibility they spent a fortune on marketing to establish brands that would set them apart from the competition some start ups spent as much as 90 of their budget on advertising speculative bubbles are notoriously hard to recognize while happening but seem obvious after they burst record amounts of capital started flowing into the nasdaq in 1997 by 1999 39 of all venture capital investments were going to internet companies that year most of the 457 initial public offerings ipos were related to internet companies followed by 91 in the first quarter of 2000 alone the high water mark was the aol time warner megamerger in jan 2000 which became the biggest merger failure in history 45the bubble ultimately burst leaving many investors facing steep losses and several internet companies going bust companies that famously survived the bubble include amazon ebay and priceline the dotcom bubble is but one of several asset bubbles that have appeared over the past centuries 