Journal of Corporate Finance Vol. 10 No. 2 2004
Net value: wealth creation (and destruction) during the internet boom
Abstract
During the internet bubble, dot-com stocks rose by a factor of 35, creating what we now know were massively distorted price signals. This paper looks at net value creation in a sample of 441 venture-backed dot-coms that received over US$21 billion from private and public equity investors. As of the end of 2001, this US$21 billion corresponded to an estimated US$39 billion of enterprise value, giving an annualized return-on-equity capital invested of 19%. These results suggest that, despite the distorted price signals and contrary to popular perception, wealth was created during the dot-com investment boom.
- DOI
- 10.1016/s0929-1199(03)00058-0
- Volume
- 10
- Issue
- 2
- Pages
- 281-299
- Language
- en
- Sources
- openalex crossref bibtex:phds-export.bib