We are still seeking to understand the astonishing rise and then sharp fall of U.S. stock prices in 2000. The paper “U.S Public and Private Venture Capital Markets, 1998-2001,” describes what happened in a new light, by looking through the lens of underlying company financial fundamentals. The research reveals some important insights. For instance, contrary to popular belief, there was no single “bubble point” at which U.S. capital markets realized that a large number of publicly traded companies had little substance. Also, four sectors in particular – computer hardware and software, telecommunications and biotech/pharmaceuticals – felt the boom and then the bust even harder.
Authors: Antonio Dávila, Chris Armstrong, George Foster, John R.M. Hand
Source: IESE Insight
Subjects: Economics, Finance