Buy, Lie, and Sell High: How Investors Lost Out on Enron and the Internet Bubble

The Baby Goes Out with the Bathwater

The players in the Financial Value Chain had created a huge bubble in the shares of dot-com and telecom stocks, and at the start of the new century it burst. Many public companies and their late investors went down in the pop.

But during the time of the bubble, not all the companies taken public had been “pancake” companies—built merely for flipping. Instead, many entrepreneurs had been focused on building real companies with economic value. Some of these companies had been taken public; some had venture funding but had not yet been the subject of an IPO; others were seeking venture funding. Among them were many companies with strategies other than get-big-fast, including a large group of firms that had been ...