A web anniversary: Nasdaq 5,000 was ten years ago

Remember "The New Economy?"

[weeks]

Props to Cnet for pointing this out. Nice, quick read:

A decade ago, on March 10, 2000, it seemed almost difficult to find someone skeptical about the dazzling future of dot-com stocks. [news.cnet.com...]
What has changed in the last ten years?
Everything.

I got into the web in August 1999.

[LifeinAsia]

That's about a month before I told my boss I was quitting to start an Internet company. :)

[celgins]

I got into the web in 1995, and it was interesting to experience the dot.com era.

At its core, it was all based on get-rich-quick concepts/ideas and greed.

[creeking]

That's about a month before I told my boss I was quitting to start an Internet company.

did he ask you if he could invest in it without knowing what it was? :)

[LifeinAsia]

No. All his money was tied up in alcohol, cigarettes, and a woman.

He's probably in better position now than all the day traders of the time. :)

[maximillianos]

I remember losing my $#%@@ when my Cisco, Sun and Lucent stocks all tanked... That was fun!

I had bought Sun for around $90-$100/share... ahh the glory days... =)

[willybfriendly]

All his money was tied up in alcohol, cigarettes, and a woman

Yep, those are commodities that will always be marketable ;)

I was in a wine shop last year and asked the owner how the economy was effecting his business. His response, "When people are happy they drink, when they are sad they drink, when they are worried they drink... Business couldn't be better."

[LifeinAsia]

Yep, those are commodities that will always be marketable ;)

Yeah, but his problem was that he wasn't holding on to them- just doing commodity turnover. Well, I guess he was holding on to the woman, but I suspect she was depreciating fairly quickly...

[jsinger]

Until the 90s the majority of American's didn't buy stocks. As the market peaked in '98 and '99 the unsophisticated plunged into stocks, often buying nothing but NASDAQ techs.

Better and safer investments such as quality corporate bonds paying 7% to 8% or federally insured long term bank CDs then paying 6% were utterly ignored by the late-to-the-party rookies. Turned out the best investment of '99 was probably a 30-year U.S. treasury bond.

The investing masses are always wrong.

However, I observed then that the great majority of web techies on this august group stayed clear of Dot Com junk... hand puppet stocks or web grocers. Most of us knew that selling 50 lb bags of dog food online wasn't a good business plan.

[claus]

So, it's around 2,300 today. Around half of what it was 10 years ago. And all of us here are still around. Just goes to show that money really doesn't matter much in the grand scheme of things.

Not much has changed the past 10 years for me. Still doing work sitting in front of a screen. However, my life is more balanced now. Less work, more time for myself - and no boss :)

[jsinger]

While the cap weighted NASDAQ peaked in March 2000, most of the component stocks had fallen since late '98. The average was being supported by demand for a few huge corporations.

As I recall, something like 600 stocks were delisted from the NASDAQ by 2002. Some of them were outright scams that would have never passed NASDAQ listing standards even 5 years before.

So much blame to go around!

[jsinger]

NASDAQ 100 Index additions during 1999. Several were outright scams.

01/13/199Date Symbol Company
01/13/1999 CMVT Comverse Technology, Inc.
03/10/1999 ATHM At Home Corporation
03/18/1999 CMGI CMGI, Inc.
05/05/1999 UNPH Uniphase Corporation
05/25/1999 CNET CNET, Inc.
05/28/1999 LCOS Lycos, Inc.
06/10/1999 VISX VISX, Incorporated
06/25/1999 SEBL Siebel Systems, Inc.
07/14/1999 CNXT Conexant Systems, Inc.
08/04/1999 CIEN CIENA Corporation
09/09/1999 GBLX Global Crossing Ltd
10/06/1999 EBAY eBay Inc.
10/27/1999 VSTR VoiceStream Wireless Corp.
11/22/1999 RNWK RealNetworks, Inc.
12/20/1999 ADLAC Adelphia Communications Corporation
12/20/1999 AMCC Applied Micro Circuits Corporation
12/20/1999 BVSN BroadVision, Inc.
12/20/1999 DISH EchoStar Communications Corporation
12/20/1999 ITWO i2 Technologies, Inc.
12/20/1999 LGTO Legato Systems, Inc.
12/20/1999 MEDI MedImmune, Inc.
12/20/1999 MFNX Metromedia Fiber Network, Inc.
12/20/1999 NSOL Network Solutions, Inc.
12/20/1999 NTAP Network Appliance, Inc.
12/20/1999 NXLK NEXTLINK Communications, Inc.
12/20/1999 PMCS PMC - Sierra, Inc.
12/20/1999 QLGC QLogic Corporation
12/20/1999 RFMD RF Micro Devices, Inc.
12/20/1999 SDLI SDL, Inc.
12/30/1999 GMST Gemstar International Group, Limited

[incrediBILL]

The biggest problem is many companies of the day were giving everything away and their only source of income was the stock IPO itself.

This itself has led to the ongoing issue to this very day with people expecting everything on the Internet to be free, or tax free, or discounted below traditional products and services.

Although the bubble burst, it has set unrealistic expectations and you still see companies like Twitter exacerbating the situation by giving it away and attempting to make it up on volume.

That was the same business model of YouTube and so far the only money made from YouTube was by selling it to Google.

When will the madness end?

[johnnie]

Ahhh... Yes... Over here in the Netherlands, we had a MASSIVE fraud going on back then. A large ISP (World Online) went public and attracted some MAJOR investment, mainly because it was dot.com. However, only a couple of hours after the stock first opened, the company's previous owner dumped literally *all* her stock at submarket prices. Shares quickly plunged and the company went bankrupt, leaving thousands of investors with nothing.

It's a case that's still an open sore to many.

[Edwin]

That's about a month before I told my boss I was quitting to start an Internet company.

Almost exactly the same time for me, too!

[JS_Harris]

I remember walking into my office at work and hearing the chatter from the production floor about how the companies stock had jumped $30/share that day. LOTS of regular employees with stock options had become millionaires during the boom.

I remember walking into my office at work not too many months later and being the last person left in my department (production was shipped overseas). Walking to the bathroom and having my motion trigger the sensors and turning on the lights as I walked was creepy. It was always a busy place before...

What a ride.

10/06/1999 EBAY eBay Inc.

That's funny to see. ebay got its start by allowing players from the game Ultima Online to sell virtual goods for cash. All these years later they forgot their roots and banned all virtual goods sales. Another ride...

[drall]

I worked for Cisco during the boom ;) Even the Cisco janitors became millionaires.

[willybfriendly]

...giving it away and attempting to make it up on volume.

Nothing new. Here's a quip from the dairy industry to take to heart.

"We lose a little bit on every sale, but we'll make it up in volume.";)

[incrediBILL]

I have a friend who at the time of the dot com bust, had stock options making him a multi-millionaire on paper. He had a million dollar home, or I should say the bank did, he could've paid it off in cash. However, like many, he left it in the market hoping to ride it even higher.

He was abroad when the stock started to plunge and before he knew what was happening, his portfolio was worth less than the price of his bank owned home, he never got a chance to sell on the way down.

POOF!

All gone.

[blend27]

-- last person left in my department (production was shipped overseas)----

In one year we went from 15 to 72 to 3 as far as the IT STAFF goes. Was a Large Seasonal(none IT) company for over 30 years. POOF....

-- 06/25/1999 SEBL Siebel Systems, Inc. --

I took it off my CV in 2002 or so, still get about a dozen calls a year from recruiters. Those were the days..

[jsinger]

EBay's price is still below their 2000 peak. Few of the others on that list still trade even, or they trade as shells on the otcbb or Pink Sheets. CIEN trades on the NASDAQ off about 98% from its 2000 peak.

If you bought stocks that went public at the bubble's peak you'd really be in trouble, much worse than the -55% figure.

It's simply astounding how bad those stocks were.

Then there are "stocks" like X10, the hidden camera spammers, that were stopped just short of going public.

[jsinger]

Those weren't just business failures. They were firms that raised hundreds of million in IPOs... and then failed, often in a year or two.

I repeat (while shaking my head)... It's astounding how bad those companies were.

[LifeinAsia]

I remember back then when I started my own company (see post higher up). Our competitors spent all their time chasing investment money, issuing press releases about all the investment they've received, moving into lavish offices, and hiring way overpriced "IT" people who spent most of their time at work talking with their friends, playing online games, day trading, or sending their resumes out to the next "hot" company.

Meanwhile, we quietly went about bringing something to market, generating cash flow, working with loyal employees, and continuing to work in cramped nondescript offices. (We lucked into office space in an incubation building so we actually had a hot address, yet we were only paying a few hundred dollars/month for it.)

Not one of those companies is around today. Most had to move out of their huge offices within a couple of years (if they were even still around). And a few were sending us resumes within the year.

Some people like to read the obituaries. I like visiting the sites of old competitors and see that they are now parked by domainers getting money from ads. :)

[webfox007]

The good old days....or maybe not. My $10M B round was pulled this month 10 years ago. We were months away from an IPO like the rest of the get rich backed VC companies. We had just added another 30 employees to ramp up and then the money disappeared....4 months later we were a casualty statistic. Ironically we made it in forbes the same month we imploded....what a rush.

[creeking]

guy I used to work with interviewed with a small St Louis company that had raised $10 million during that period. (He declined the job offer.)

The company spent 6 million to buy a building, leaving them 4 million to work with.

out of business shortly afterwards.