The infamous dot-com boom (and later, bust) is widely believed to have begun in 1995 with the IPO of Netscape, the company that created the first widely popular web browser. Netscape, co-founded by now-legendary venture capitalist Marc Andreessen, was an unprofitable company that strategically utilized positive PR to garner investor enthusiasm for their IPO. This PR effort effectively reached relatively inexperienced investors that contributed small amounts of capital to the public market, did not rely on market research when making investment decisions, and did not need significant returns on their investments to make an income (as public equity investing was only a supplement to their primary income sources). These kinds of investors are affectionately called mom-and-pop investors, because they are ordinary, everyday people with no specialized expertise in finance or accounting. As word of Netscape’s pending IPO spread across the country, these mom-and-pop investors urged their financial advisors and brokers to help them get in on the big IPO opportunity.
Thank you for another interesting and thoughtful article.
Informative!