The 2000 Dot Com Bubble Burst Explained in Simple Terms.
What caused the technology frenzy? And what caused it to burst?
A new era was on the horizon. The internet has presented limitless opportunities to revolutionize the world of business and many wanted to join in either through an enterpreneurship spirit (1 in 7 Americans said they were building a business in a survey in 1999) or through acquiring stocks of internet-based companies.
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Now, to put things into perspective, what caused the bubble? The answer is excessive speculation from both institutional and retail rades in internet-based companies. The 1990s saw an explosion in internet companies which prompted market participants to buy these shares in anticipation of a further appreciation. By disregarding the fragile fundamentals, people kept buying into the bubble until it was no…
