What You Should Know Before Investing in Dot Coms

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In 2002, eBay and other thriving DOT-COM companies faced bankruptcy. These companies had extremely high valuations, but their operations were unprofitable, and they subsequently ceased operations. Internet historian Brian McCullough analyzed the rise and fall of the Bubble and reveals why NASDAQ stocks fell by $5 trillion by the end of the year. However, the recent financial crisis has given some companies a second chance. There are a few things you should know before investing in dot-coms.

How to Investing in Dot Coms

dot com

When the Internet became popular in the mid-2000s, dot coms swept the world. Valuations rose exponentially, making it possible for companies with “dot-com” names to gain astronomical valuations on the stock market. However, these companies spent lavishly on marketing and brand recognition and little on their products. This trend led to a dot-com bubble that popped in 2001. The collapse of the dot-com bubble led to a mild recession in many developed nations.

A dot com is a domain name on the Internet. It is usually associated with a company that specializes in commerce. Some of the top-performing dot coms are Amazon, eBay, and Google. These companies made their fortunes by selling products online. They would deliver the goods to their customers. They would then take payment for the goods. This business model proved to be very lucrative. A dot COM company can earn billions.

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