Guest Post by Simon Black
In July 1994, an ex-hedge fund VP left his cushy Wall Street job and started a new company called Cadabra, Inc.
He wanted to capitalize on an emerging trend that was called the “Information Superhighway” back then, what we now know today as the Internet.
Cadabra was an early ‘dot-com’ company. But as more and more people started accessing the Internet in the mid-1990s, the number of dot-com companies exploded.
Before long, there were countless entrepreneurs raising billions of dollars and taking their dot-com companies public.
Most of these companies were losing tons of money and had no hope of ever turning a profit.
But investors didn’t care. The Internet was the next big thing, and the stock prices of even the stupidest dot-com companies were soaring to record highs.
The bubble eventually burst. Investors collectively lost more than $5 trillion as the share prices of dot-com companies plummeted. Most dot-coms went out of business altogether.
Cadabra was one of the few dot-com businesses that survived the crash. But by then, of course, it had already changed its name to Amazon.
Continue reading “The next big investment trend is on sale right now”
