Tech bubble (original) (raw)

In February 2000, stock prices for e-business and "Dot-com" companies started to fall. Many companies had very weak and optimistic business plans, failed to raise renewed funding, and had to lay off workers and close down operations.

In Europe the vast amounts of cash the mobile operators spent on 3G-licences in Germany and Italy for example led them into deep debt. The investments were blown out of proportion regardeless of whether seen in the context of their current or projected future cash flow, but this fact was not publicly acknowledged until as late as 2001 and 2002. Due to the highly networked nature of the IT industry this quickly lead into problems for small companies that were dependent on contracts from operators.

The downtrend first reached the highly specialized "dotcom" companies, but soon spread to computer manufacturers, telecom, and industry in general.