The dot-com crash began when investors abandoned highly valued internet and technology companies.
The collapse followed the dot-com bubble, a period in the late 1990s when enthusiasm for internet businesses drove technology-share valuations to extreme levels. Many companies had little revenue or no profits, yet investors expected rapid growth and used stock prices to measure future potential.
The Nasdaq Composite reached 5,048.62 on March 10, 2000, then fell sharply as optimism faded and companies struggled to meet expectations. The index lost about 78 percent of its value from its peak to its October 2002 low. The crash did not destroy the internet itself: companies with sustainable business models eventually grew, while many speculative firms disappeared. It is also distinct from the 2008 crash, which centered on housing finance and banking.