Definition of Dotcom bubble:
The dotcom bubble, also known as the internet 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. During the dotcom bubble, the value of equity markets grew exponentially, with the technology-dominated Nasdaq index rising from under 1,000 to more than 5,000 between the years 1995 and 2000. In 2001 and through 2002 the bubble burst, with equities entering a bear market.
A stock market bubble fueled by the rise of the Internet and the technology industry. The bubble was caused by the growth of Internet users and investors poured in money to finance start-up Internet based companies without any caution as to whether these companies can turn a profit or not. When the dotcoms failed to report a profit, the bubble burst which triggered a mild economic recession.
The crash that followed saw the Nasdaq index, which had risen 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 had gone 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 dotcom peak, which it did on April 23, 2015.
How to use Dotcom bubble in a sentence?
- The value of equity markets grew exponentially during the dotcom bubble, with the Nasdaq rising from under 1,000 to more than 5,000 between 1995 and 2000.
- The bubble also caused several internet companies to go bust.
- The Nasdaq, which rose five-fold between 1995 and 2000, saw an almost 77% drop, resulting in a loss of billions of dollars.
- Equities entered a bear market after the bubble burst in 2001.
Meaning of Dotcom bubble & Dotcom bubble Definition