The rise of a great power: starting with military industry

Chapter 1017: Internet Winter

Of course, there is another important thing about this economic conference, which is the bursting of the Internet bubble.

In fact, the bursting of the Internet bubble did not start in China, but in the United States. However, with the globalization of the world economy, it naturally affected China's Internet.

The Internet crisis in the United States is not something that has just occurred. In fact, it has been brewing for a long time.

In 1992, America Online, which provided dial-up Internet access services, went public, and its stock price continued to soar. Netscape, which relied on browsers, also saw its stock price soar after its listing. The search engine Yahoo soared after its listing. Amazon, founded by Jeff Bezos in 1994 to sell books online, saw its stock price rise by 33% on its first day of listing.
In the United States, as long as an Internet company goes public, its stock price will soar, creating one myth of benefit after another. In just a few years, hundreds of American Internet companies have gone public, creating thousands of billionaires.

In fact, except for a few companies, many of these American Internet companies have very low profits or even lose money.

But as long as it is packaged well and put on the market, it can be listed to make money.

In 1997, the Asian financial crisis started in Thailand swept the world. Stock markets in Hong Kong, Japan, London and Germany fell one after another. The United States, as a major creditor country, began to plummet immediately on October 10. The exchange activated the "circuit breaker" mechanism to suspend trading. However, for the stock market with a large number of retail investors, the "circuit breaker" mechanism not only failed to calm investors, but made everyone more panic and desperate. Therefore, after the market restarted, they sold stocks one after another. The exchange activated the "circuit breaker mechanism" again and the market closed early. On October 27, the market fell and then rebounded. The stock market experienced its first major shock.

Starting from 1998, due to the convenience of Internet transactions, the buyers and suppliers of stocks have increased significantly, and market fluctuations are extremely easy to amplify. Throughout 1998, AOL rose 593%, Yahoo rose 584%, and Amazon rose 970%.

eBay went public in the United States on September 1998, 9, and its share price rose by 24% on the same day.

In 1999, as the Balkan war broke out, trillions of dollars flowed from Europe to the United States, with most of the funds pouring into Internet companies. After all, Internet companies were favored and were a good choice for investment.

European investors are unaware that most Internet listed companies have meager profits or even lose money; they are just well packaged.

A large amount of funds have poured into listed Internet companies and those that have not yet been listed. Internet companies have received a large amount of funds and are spending it like water.

The market is also full of optimism. Books that are bullish on the index have become best-sellers, financial magazines are selling like hot cakes, and investors are full of optimism about the future. It can be said that everyone in the United States is speculating in stocks.

Yahoo has carried out its two largest mergers and acquisitions. One was the acquisition of Geocities, a free-to-play website, for $36 billion in stock, and the other was the acquisition of Proadcast.com, an online radio site, for $57 billion in cash. Before the Internet crash, Yahoo's stock price reached an all-time high of $475, with a market value of more than $1000 billion.

美国风投公司的投资项目从1996年的2123个项目112亿美元上升到1999年的3975个项目594亿美元，项目投资规模达3倍有余。

On November 1999, 11, Webvan, an online supermarket, went public and its closing price was more than five times higher than its IPO price.

On January 2000, 1, AOL offered $10 billion to acquire Time Warner, the world's largest media company.

At least 17 Internet companies with plenty of money spent heavily on advertising during the Super Bowl. Some of the ads had no idea what they were talking about and were simply there to take up advertising time.

3Com, a company that makes handheld computers, had a market value of its subsidiary Palm that was twice that of the parent company after it was spun off and listed. This means that the parent company had serious negative assets and was simply digesting them.

Market investors sold pharmaceutical stocks, financial stocks and blue-chip stocks and bought Internet company stocks. The Nasdaq index rose from 3000 points to 5000 points in just four months.

The Federal Reserve began to raise interest rates in late 1999, and raised them six times in just a few months. So far, a large number of Internet stock prices have fallen by more than 6%!

The bursting of the US Internet bubble quickly spread to the Internet around the world, and as another Internet center in the world, China's Internet was also affected.

In January 2000, Kingsoft Corporation, a multinational computer technology company, was actually the largest company engaged in R&D, manufacturing, licensing and provision of a wide range of computer software services. Its main core businesses were Kingsoft operating system and Kingsoft series software. It had more than 1 employees, R&D centers, research institutes, technical support centers, product development and technical support service agencies all over the world. Since trillions of dollars flowed from Europe to the United States last year, the company's stock price has been rising, and by January its market value was 6 billion US dollars.

Hong Kong Sohu Co., Ltd. is the world's earliest Internet portal and also the world's largest Internet portal. Its services include search engines, e-mail, news, etc. It has 2 employees. Its stock price has been rising since last year, and its market value exceeded US$1 billion in January.

Hong Kong Penguin Co., Ltd. is a multinational Internet technology company, mainly engaged in the field of online social networking, including Internet chat software, Internet games, etc. Its global headquarters is in Hong Kong, and it has established Asia headquarters, North American headquarters, South American headquarters, European headquarters, Middle East headquarters, and African headquarters. It has more than 10 employees. By January, its market value exceeded US$1 billion, making it the world's most valuable Internet company.

Behind these three Internet companies is Panshan Group, but through various means, the shares are dispersed.

Since March last year, Liu Tao began to gradually cash out Panshan Group. After all, Panshan Group holds a large number of shares.

By the end of January, Panshan Group's shares in these three companies had fallen below 1%, and it had cashed out a large amount of funds.

In addition to European funds, domestic American funds also took over.

Liu Ziyu and Chen Nien-jen's "Dandelion" Internet technology company has seen a sharp rise since March last year. In January, its market value exceeded HK$3 trillion, making it the Hong Kong-listed Internet company with the highest market value.

Alibaba, founded by Ma Yun, is an online Sino-foreign trade service and e-commerce company. By January 2000, when it went public, its market value exceeded US$1 billion, while its profit in 1500 barely reached US$1999 billion.

The Internet gaming company founded by Qian Zhenguo went public in 1999, and by January 2000 its market value in Hong Kong had reached HK$1 billion.

The stock prices of American Internet companies have been rising continuously, and the stock prices of Chinese Internet companies have also been rising, but the increase is not as exaggerated, and they are not spending money like American Internet companies.

But even so, there are still more than 200 Internet listed companies in China's Hong Kong and A shares.

For example, the search engine company "Easy Search" founded by Zhang Chaoyang had a market value of HK$2500 billion just after its listing, but in fact its profit was less than HK$10 billion.

The Internet bubble in the United States is serious, and the Internet bubble in China is also serious.

Therefore, after the bursting of the US Internet bubble, it immediately affected China's Internet, causing the stock prices of China's Internet listed companies to continue to plummet.

Investors and investment institutions all want to withdraw and stop losses in time, but it is not that easy.

(End of this chapter)