The dot-com bubble (1995 – 2000)

A new type business came out into view in the mid-1990s, The .com, a company based on the Web or servicing the internet, its people and its technology. In beginning when dot com stock values shot skyward venture capitalists  started all together to finance Internet startup 

As there was no certain business plan of dot com that can stop many VCs from investing in it. While investors and startup executives thought that the .com would gain the attention of people they will get back the reward for their investments. 

Speculators crawled in making a market full of wildly overvalued startups, spending so much on gigantic publicity campaigns followed. dot com burned through their VC money with hope that it will come back soon. Day trading became relatively common way to make fast money. 

Though the government hasn’t paid attention to .com startups or speculation, its policies and timing mightily contributed to a loss of confidence. Between 1999-2000 interest rates were raise six times to prevail the economy and in meantime a flurry of government investigations stalled corrupt business practices. 

For example as the NASDAQ began its slide, Microsoft was declared a monopoly. Main telecommunication companies like MCI Worldcom was fall in heavy debt and management scandals. Regulators put the financial industry under fire for misleading investors during the .com boom and famous Enron was collapsed when the investigators found out an accounting scandal. 

In 2002 the Sarbanes-Oxely Act was passed out having unyielding transparency and accountability standards for public companies. 

Lesson 

The market always welcomes new technology but on long run it become harsh giving you a hard blow of losing assets.