Nasdaq Bubble Essay

846 words - 4 pages

THE NASDAQ BUBBLE OF 1999-2000

The Nasdaq index was first compiled in 1971; before then, there was no formal measure of growth stocks, although some economists used the Wiesenberger growth funds as a proxy index. Yet while there were some excesses in growth stocks, their rise and fall had not been much different from the S&P 500 index, as shown in the figure 17.12 until the 1999-2000 period, when the Nasdaq index rose so much that many growth stock valuations really did take on tulip bulb characteristics.

The foundation for the high-tech bubble was laid in late 1995, when Netscape went public, raising approximately $ 2 billion in its IPO and making Jim Clark the first internet ...view middle of the document...

Yet investors continued to ask for more.

At least in retrospect, some investors said they knew the market was ready for a downturn on March 3, 2001, when Palm Pilot, a spinoff 3Com, rose to a record high of $ 95 per share on the opening day of its IPO. 3Com had said it would spinoff 1.5 PALM pilot shares for each share of 3Com, so even if the rest of the company was entirely worthless, the price of palm should not have been higher than two-thirds of the closing price of 3Com that day, which was $ 81.81. But obviously palm was worth a lot less than $ 54.54 unless you really believed the rest of the company was worthless at that point, Short sellers could have purchased the rest of 3Com at a price of - $ 63 per share that day, yet the negative value was not erased for more than two months. Eventually, of course, the price of palm shares dropped substantially, in early 2002 they were selling for about $ 1 per share. The point is that even arbitrageurs, who could have made a killing by acting on the absurd difference in the share price of these two companies, failed to move. It was at this point that a few traders began to realize that a major selloff seemed almost inevitable - although they did not say so for several more months.

In terms of its magnitude, the Nasdaq bubble is comparable to the great bull market of the late 1920s and the...

Other assignments on Nasdaq Bubble

The Vc Shakeout Essay

2033 words - 9 pages performance. Another reason VC’s star is on the wane: Re- search by University of Chicago economist John H. Cochrane shows that investments in VC portfolio firms did not outperform investments in other NASDAQ stocks during the boom period of the 1990s. In short, the VC business is bad, and there are few signs that things will improve any time soon. We reached out to highly placed VC partners, VC-backed CEOs, and fund managers for wealthy investors

Hospitals Paper

6014 words - 25 pages I hope to provide in this paper a comprehensive understanding for what the term “hospital” has become. Hospitals are an extremely complex system that man has created and shaped and reshaped throughout history. My goal in writing and researching this paper will be to provide those who read it a clear understanding on how the hospital system got to where it is today, and to shed some light on the many organizations that affiliate with and

Course Syllabus

2610 words - 11 pages [pic] COURSE SYLLABUS Semester: Fall, Year: 2012  College Mission Statement Richard J. Daley College provides high-quality education which leads to academic success, career development, and personal enrichment that fulfill diverse community needs. Mathematics Department Mission Statement Our mission is to deliver excellent service and to provide learning opportunities by offering a wide range of mathematics courses, which will help our

Management

1477 words - 6 pages Boeing Management Planning Heather Oetzel MGT 330 October 22, 2012 Joe Cheng Abstract Boeing is known as “the world’s leading aerospace company and the largest manufacturer of commercial jetliner and military aircraft combined ("The Boeing Company: About Us", 2012). Every company uses different types of management techniques including how the planning function of management is used. Planning allows organizations to develop how the

Assisted Suicide

1015 words - 5 pages Should physician-assisted suicide be legal? While I believe if one chooses to end his or own life through physician assistance for reasons that they chose, the choice should be up to the individual. Physician-assisted suicide should be at one's discretion. “Assisted Suicide, also called Voluntary Euthanasia, is currently a contentious issue in many countries. Because Euthanasia is legal in a few modern democracies: the Netherlands, Belgium

Tanglewood Case 1

797 words - 4 pages Tanglewood’s staffing strategy requires the organization to make key decisions about the acquisition, deployment, and retention of the organization’s workforce. In order to accomplish this, Tanglewood’s must make thirteen decisions regarding its staffing levels and its staffing quality. One of the first decisions that Tanglewood needs to choose is to acquire or develop talent. Tanglewood should try to develop their current talent because one

Nnnnn

1391 words - 6 pages Есе по въпроса: Кои от всички „действащи” лица могат да се разглеждат като морално отговорни и в какво именно? по казуса Форд „Пинто” Корпоративните злодеяния са нанесли повече вреди на обществото от всички улични престъпления взети заедно. Според данни на ФБР сумата от уличните престъпления възлиза на $3.8 млрд. годишно, а загубите от корпоративните измами между $100 млрд. и $400 млрд. годишно

The Penis

1052 words - 5 pages The short story ”The Penis” is written by Hanif Kureishi. The short story is about a penis, which has been separated from its owner Doug, who we hear from later on. At first though we hear about a guy called Alfie who was “a cutter – a hairdresser – and had to get to work”. He is having breakfast with his wife, when she asks him what he did last night, and if he had a good time last night? Alfie can not remember what he did last night, he then

Managed Care Paper

543 words - 3 pages Managed Care and Case Management Care Marvin Lloyd BSHS/402-Case Management 27 August 2012 Virgil Miller Managed Care are techniques employed to help reduce the cost for providing health benefits and a system for improving organizations quality of care

Media

439 words - 2 pages The life expectancy is lower; so people are not kept alive with drugs for decades in a virtual sleep state. There is less state education; so kids don't have it drilled into them that their only goal in life is to make money, at the cost of 'everything' else. The health care is less; so diseases, usually brought by Westerners, kill many more than they do in countries where drug companies can make a fortune from selling medicines that aren't

Chapter 6 International Business

7113 words - 29 pages CGGGG The Political Economy of International Trade Chapter Outline OPENING CASE: Why Are Global Food Prices Soaring? INTRODUCTION INSTRUMENTS OF TRADE POLICY Tariffs Subsides Country Focus: Subsidized Wheat Production in Japan Import Quotas and Voluntary Export Restraints Local Content Requirements Administrative Polices Antidumping Policies Management Focus: U.S. Magnesium

Similar Documents

Bernard Madoff Essay

2506 words - 11 pages phone with a broker; there was no centralized exchange and no technology to provide up-to-date prices. Madoff saw this as an opportunity to create a centralized computer system that would display stock quotes in real time. His firm was among the earliest to use this technology for trading. This led to the creation of a global electronic marketplace for buying and selling securities, NASDAQ, the National Association of Securities Dealers

Corporate Responsibilities Of Sarbanes Oxley Act Of 2002

4874 words - 20 pages option and bonus practices, combined with instability in stock prices for even small earnings "misses," resulted in pressures to manage earnings. [4] Stock options were not treated as compensation expense by companies, encouraging this form of compensation. With a large stock-based bonus at risk, managers were pressured to meet their targets. The internet bubble was for the investors who had been stung in 2000 by the sharp declines in technology

Mgt216 Essay

714 words - 3 pages The first ethical issue presented in the ethics game simulation was whether to warn consumers about the contaminated product and what information to provide consumers about the contaminant. The second ethical issue was whether to sell a product that does not meet U.S. safety requirements in a foreign market that has lower safety restrictions. G-BioSport was not required to meet prior approval from the Federal Drug Administration before they

Economy Effect Of Marijuana Essay

277 words - 2 pages Modern American History by Alan Renga 2nd Mid Term! You will be given 3 Short Essay questions and 20 Multiple Choice questions deriving from this list! 80 points total! The 1920s Warren Harding then Calvin Coolidge Tea Pot Dome 1st Red Scare Immigration Restriction, Sacco and Vanzetti Langston Hughes, Marcus Garvey, KKK Prosperity, advertising Prohibition, Al Capone Flappers, Clara Bow, Rudolph Valentino Babe Ruth, Jack Dempsey