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Technology Stocks : Semi Equipment Analysis
SOXX 309.40+1.0%Dec 5 4:00 PM EST
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To: The Ox who wrote (5637)9/25/2002 8:59:51 AM
From: willcousa  Read Replies (1) of 95531
 
The market bubble was just like real estate bubbles. A developer will build a building if he can get someone to put up the money. When new buildings put more space into the market than the market can bear, the bubble bursts. All buildings suffer when the bubble pops.

So tech related companies got started simply based upon whether you could get someone to raise the money for you. In this case it was the investment bankers who did a lot of the raising thru sale of stock. What did they have to lose? Like the building developers they got a lot of front money from their activity. If the company later went bust they had long since taken their front fees and run. Finally there were enough failures that people quit putting up the money. Now we all get to pay for it. At least in the real estate scenario the banks end up with an empty building which will someday regain some value. Many of the companies created are worthless.
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