Dot com crisis

The dot-com bubble crisis
The dot-com bubble crisis

During the late twentieth century and the beginning of the new millennium, many companies developed technology, becoming part of a networksystem, which would give an apparent international economic development, known as "New Economy", that little by little, make that technology impact in new companies that grew and grew in an exponentialform, generating an increase in publicly traded securities. Such was the growth and development, that speculation of a possible break out of this "bomb" was present. This generated a different impacton international investors of the dot-com and technology, because investors began to notice that the principles of the New Economy did not differ from the previous economy, requiring that the moneyinvested in start-ups could be recovered within a reasonable time and underestimated the complexity and logistics costs distribution. They overestimated some effects of the networked economy, theeconomy of providing free services new rewards network, that were also free.

The other international fundamental factor that explains the fall is inherent in the functioning of financial markets:information. The views of some economists and businessmen of establishment, ended up actually imposed by self-fulfilling prophecy that one day the bubble would burst.
The existence of an overvaluation ofcertain stocks of technology companies fueled speculative.

The international opening of a new market, generated in different countries, committed companies to invest in those others that weredeveloping technology and increasing its market value.
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The dot-com bubble crisis, lasted four years, from 1997 to 2001, thiscrisis refers that the stock prices get higher in the Internet and technology areas of the “Western nations”. The causes of this crisis were that the companies followed a model called “Network effect”,...