Richard A. D'Aveni, Professor of Strategic Management

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The China Bubble

At the height of the dot-com buttle in 1999, the magic word for hyping a stock was "internet." Pets.com, one of many speculative dot-com companies, earned a gilded stock price of $11 per share in early 2000. Buoyed by an initial investment by Amazon.com, it ultimately raked in $300 million in early financing. Like many Internet companies in that era, however, it never earned a profit; when the buttle popped in late 2000, just months after Pet.com went public, the company announced its liquidation, driving shares down to 19 cents, a 98 percent loss. Today, the magic word for hyping stock could be "China".

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