Party like its 1999

1
Party like its 1999

• CAPP Presentation
• August 29, 2006

2
Euphoria

• Netscape scheduled for 12-14
• Opened at 28
• First Day High 75 (167)
• Yahoo jumped 155 on its opening day in 1996

3
November 10, 1999

• The Globe.com
• Opening Day Open 13
• Opening Day Close 63.50 (474)
• Market Cap - 976 million
• Biggest opening day gain in stock market history

4
Everyone Was Winning!

• RYAN JACOB, JACOB
• ASSET MANAGEMENT
• From Late 1997 to mid 1999
• Funds went from less than 200,000 to
• 700,000,000
• From Aug 95 Mar 00
• NASDAQ rose 441

5
The Peak Spring 2000

• AOL buys Time Warner
• Yahoo reaches 250 all time high

6
The graveyard
7
Clinging to Life


8
Overall Damage

• Between March 2000 when it peaked and April
  2001, a year after it crashed, over 4 trillion
  was wiped from the American stock market.

9
August 29, 2006

• The Globe.com
• Opening Day Price 63.50
• Market Cap - 976 million
• Current Price 0
• Closed doors August 15,2001

10
Why?

• Expensive advertising campaigns attract traffic
  but cannot turn traffic into revenue.
• Internet provides tremendous profit in supply
  chain. This ends up almost completely in
  customers pockets.
• Traditionally, customers finance companies.
  During the internet craze, equity markets have
  been financing internet startups.

11
Why?

• Pie in the sky projections may not be true.
• Get big fast credo in place of profits does not
  work.
• Companies in businesses that will never make
  money.
• Social psychology at work (feeding frenzy)

12
The Survivors
13

• Nov 99 Stock price 66.5 (17.8B)
• Aug 06 Stock price 157 (36.7B)
• Difference 106
• Business Model Online Auction Service
• Why did it survive and thrive?

14
Lessons Learned

• The Internet does not replace, but rather
  supports a business.
• Success requires using the internet to improve
  the buying experience.
• You cant go against fundamental business rules.
• Reason always prevails.

15

• Questions?