Is there a bubble in the last waves of IT companies?

A stock market bubble is defined as "a surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive selloff occurs." The so-called "dot-com" bubble that arose in the late 1990s is considered as a major one of them. It emerged with the fast growing popularity of the Internet technology and people's easy access to personal computers. Today, the Internet technology is even much more spread out than during the dot-com bubble and a new technology platform: the smartphone is making everyone more connected than ever before. This current context resembles the one of the first dot-com bubble as it presents most of the same characteristics. This research paper compares different financial and non-financial aspects from both periods to determine if an asset bubble could be potentially developing on the IT sector's newly listed companies.

Autorentext

Arthur Merle, MSc finance graduate from the Grenoble Graduate School of Business has worked as a junior control accountant at Manulife John Hancock and as a claim administrator at Sun Life Financial. He currently occupies an analyst position at Bloomberg

Klappentext

A stock market bubble is defined as "a surge in equity prices, often more than warranted by the fundamentals and usually in a particular sector, followed by a drastic drop in prices as a massive selloff occurs." The so-called "dot-com" bubble that arose in the late 1990s is considered as a major one of them. It emerged with the fast growing popularity of the Internet technology and people's easy access to personal computers. Today, the Internet technology is even much more spread out than during the dot-com bubble and a new technology platform: the smartphone is making everyone more connected than ever before. This current context resembles the one of the first dot-com bubble as it presents most of the same characteristics. This research paper compares different financial and non-financial aspects from both periods to determine if an asset bubble could be potentially developing on the IT sector's newly listed companies.