Chapter 1017: Internet Winter

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

In fact, the bursting of the Internet bubble did not start from China, but from the United States. However, the globalization of the world economy has naturally affected the Chinese Internet.

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

In 1992, America Online, which provides dial-up Internet services, went public, and its stock price soared year after year. Netscape, which relies on browsers, also soared year after year after its listing. The search engine Yahoo soared after its listing. Amazon, founded by Jeff Bezos in 1994 for the purpose of selling books online, rose 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 a myth of benefit. In just a few years, hundreds of American Internet companies have gone public and created 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 they are packaged and listed, they can go public to make money.

In 1997, the Asian financial crisis, which started in Thailand, swept the world. The stock markets of Hong Kong, Japan, London and Germany fell one after another. As a major creditor country, the United States began to plummet on October 27. 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 28, the market fell and then rebounded, and the stock market experienced its first major shock.

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

1Bay went public, and the increase on the same day reached 163%.

In 1999, with the outbreak of the war in the Balkans, trillions of dollars flowed from Europe to the United States, and most of the funds poured into Internet companies. After all, Internet companies were optimistic and a good choice for investment.

European investors did not know that most Internet listed companies had meager profits or even lost money, but they were just well packaged.

A large amount of funds poured into listed Internet companies and those that had not yet been listed. Internet companies received a lot of funds and spent money like water.

The market was also full of optimism. Books that were bullish on the index became the best-selling books, and financial magazines were selling well. Investors were optimistic about the future, and the United States could be said to be a country full of stock speculation.

Yahoo conducted the two largest mergers and acquisitions. One was Yahoo's acquisition of Geocities, which provided free services, for $3.6 billion in stock, and the other was Yahoo's acquisition of Proadcast.com, an online radio site, for $5.7 billion in cash. In the early days of the Internet crash, Yahoo's stock price reached a historical high of $475, with a market value of more than $100 billion.

The investment projects of US venture capital companies increased from 2,123 projects with a total investment of US$11.2 billion in 1996 to 3,975 projects with a total investment of US$59.4 billion in 1999, with the scale of project investment more than three times.

On November 2, 1999, Webvan, an online supermarket website, went public, and its closing price rose more than five times from the IPO price.

On January 10, 2000, America Online offered US$165 billion to acquire Time Warner, the world's largest media company.

At least 17 Internet companies with plenty of money spent a lot of money on advertising during the Super Bowl. Some of the ads had no idea what they were talking about, and were purely for the purpose of occupying advertising time.

The market value of 3Com, a company that makes handheld computers, after the spin-off of its subsidiary Palm, was actually twice that of the parent company, which means that the parent company was seriously negatively asset-bound and was simply digesting it.

Market investors sold pharmaceutical stocks, financial stocks and blue-chip stocks to buy Internet company stocks. The Nasdaq index rose from 3,000 points to 5,000 points in just four months.

The Federal Reserve began to raise interest rates at the end of 1999, and raised interest rates six times in just a few months.     So far, a large number of Internet stocks have fallen by more than 70%!

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

In January 2000, as a multinational computer technology company, 'Hong Kong Kingsoft Co., Ltd.', which is actually the largest company focusing on R\u0026D, manufacturing, licensing and providing a wide range of computer software services, has more than 60,000 employees, R\u0026D centers, research institutes, technical support centers, product development and technical support service agencies all over the world. Since last year, more than one trillion US dollars flowed from Europe to the United States, the company's stock price has been rising, and by January, the market value was 380 billion US dollars.

Hong Kong Sohu Co., Ltd., the world's earliest Internet portal and the world's largest Internet portal, has services including search engines, e-mail, news, etc. It has 20,000 employees. Since last year, the stock price has been rising continuously, and by January, the market value exceeded 200 billion US dollars.

Hong Kong Penguin Co., Ltd. is a multinational Internet technology company, mainly 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 100,000 employees, and its market value exceeded US$500 billion in January, making it the Internet company with the highest market value in the world.

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

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 dropped below 5%, cashing out a large amount of funds.

In addition to European funds, there are also local funds in the United States.

Liu Ziyu and Chen Nianzhen's "Dandelion" Internet Technology Company has seen a strong rise since March last year. By January, the market value exceeded HK$3 trillion, becoming the highest market value among Hong Kong-listed Internet companies.

Alibaba, founded by Ma Yun, is an online Sino-foreign trade service and e-commerce company. By January 2000, its market value exceeded 150 billion US dollars, while Alibaba's profit barely reached 1 billion US dollars in 1999.

The Internet game company founded by Qian Zhenguo was listed in 1999, and by January 2000, its market value in Hong Kong reached 200 billion Hong Kong dollars.

The stock prices of American Internet companies have been rising continuously, and China's Internet companies are also rising, but the increase is not so exaggerated, and they are not as lavish as American Internet companies.

But even so, there are 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 250 billion Hong Kong dollars as soon as it was listed, but in fact, its profit was not even 1 billion Hong Kong dollars.

The Internet bubble in the United States is serious, and the Internet bubble in China is also in a bubble, and the bubble is not small.

So after the bursting of the Internet bubble in the United States, it immediately affected the Internet in China, causing the stock prices of Internet listed companies in China to fall continuously.

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