Wednesday, March 11, 2015

Will the Dot Com Bubble Happen Again?

Though it’s been 15 years since everyone was disillusioned by the supposed economic empowering potential of the late 1990s era internet, will the dot com bubble going bust happen again?

By: Ringo Bones

Even though the NASDAQ just reached its highest point – as in around 4944 points – in 15 years March 9, 2015, many investment gurus are again sounding the alarm because we might me on the verge of another dot com boom going bust this year. So should Apple shareholders start panicking?

The “infamous” dot com bubble of March 9, 2000 that send many an unwary investor to the poorhouse primarily happened when overvalued tech stocks – as in internet stocks circa year 2000 – suddenly lost 80 percent or more of its share value. Remember the dog sock puppet advert of Pets.Com or Webvan?  These were the top two most famous dot com bubble failures in living memory.

From my own humble perspective, part of why these dot com enterprises failed back then is the high cost of just getting on and staying connected on the internet during the late 1990s. Back in 1998, a 1-megabit-per-second connection on average costs 1,200 US dollars a month!!! Which means even high-value stocks not making constant profits are hemorrhaging money. Not to mention the 2-million US dollar for a 30 second ad spot being paid by these internet start-ups during the year 2000 Superbowl a month before the bubble burst is probably the straw that broke the proverbial camel’s back. 

No comments: