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Emergence of a second Dot-Com boom? – An assessment of indications for overvalued Internet firms and the risk of another Dot-Com bubble

Falch, Florian Wendelin LU and Pappa, Madis LU (2012) BUSN89 20121
Department of Business Administration
Abstract
The main goal of this thesis is to determine to what degree can there be observed indications for an overvaluation of Internet companies, which in turn may lead to the next asset price bubble in the Internet industry. By conducting an ex-ante analysis, the current study sets out to add additional knowledge in regards to whether and how well the emergence of a bubble can be determined in advance.
The findings of this study show no statistically significant short sale constraints, no divergence in investors’ opinion and no negative abnormal returns upon the lock-up expirations for Internet firms, which would otherwise indicate them being overvalued. However, considering the announcement about Facebook’s IPO as an alternative event, the... (More)
The main goal of this thesis is to determine to what degree can there be observed indications for an overvaluation of Internet companies, which in turn may lead to the next asset price bubble in the Internet industry. By conducting an ex-ante analysis, the current study sets out to add additional knowledge in regards to whether and how well the emergence of a bubble can be determined in advance.
The findings of this study show no statistically significant short sale constraints, no divergence in investors’ opinion and no negative abnormal returns upon the lock-up expirations for Internet firms, which would otherwise indicate them being overvalued. However, considering the announcement about Facebook’s IPO as an alternative event, the results suggest that there can be seen signs of overvaluation of Internet firms, indicating the possible entrance into a next bubble (i.e. early stage of a bubble). (Less)
Please use this url to cite or link to this publication:
author
Falch, Florian Wendelin LU and Pappa, Madis LU
supervisor
organization
course
BUSN89 20121
year
type
H1 - Master's Degree (One Year)
subject
keywords
Dot-Com bubble, overvaluation, Internet firms, short sale constraints, divergence in investors’ opinion, lock-up period, cumulative abnormal returns, M&A intensity
language
English
id
2740541
date added to LUP
2012-06-25 12:05:46
date last changed
2012-06-25 12:05:46
@misc{2740541,
  abstract     = {The main goal of this thesis is to determine to what degree can there be observed indications for an overvaluation of Internet companies, which in turn may lead to the next asset price bubble in the Internet industry. By conducting an ex-ante analysis, the current study sets out to add additional knowledge in regards to whether and how well the emergence of a bubble can be determined in advance.
The findings of this study show no statistically significant short sale constraints, no divergence in investors’ opinion and no negative abnormal returns upon the lock-up expirations for Internet firms, which would otherwise indicate them being overvalued. However, considering the announcement about Facebook’s IPO as an alternative event, the results suggest that there can be seen signs of overvaluation of Internet firms, indicating the possible entrance into a next bubble (i.e. early stage of a bubble).},
  author       = {Falch, Florian Wendelin and Pappa, Madis},
  keyword      = {Dot-Com bubble,overvaluation,Internet firms,short sale constraints,divergence in investors’ opinion,lock-up period,cumulative abnormal returns,M&A intensity},
  language     = {eng},
  note         = {Student Paper},
  title        = {Emergence of a second Dot-Com boom? – An assessment of indications for overvalued Internet firms and the risk of another Dot-Com bubble},
  year         = {2012},
}