"Paul Krugman believes that Greenspan has been waiting for the bubble to burst, and after the bubble bursts, he will come out to clean up the mess, and the Fed's interest rate hike will have a profound impact on the collapse of the Nasdaq index, which is dominated by Internet companies."

Paul Krugman, a New York Times columnist who would later win the Nobel Prize in Economics in 2008, is perennially pessimistic about the Internet.

In 1998, before the bubble was blown up, Krugman believed that by 2005 the Internet would not have a greater impact on the economy than the fax machine.

"Burn up, warn, internet companies will run out of cash faster than people think."

MicroStrategy Shares Plunge 62%

Shares of MicroStrategy, a Vienna-based software company, plunged 62 percent yesterday after the company announced yesterday that its revenue for the first half of 1999 was much lower than initially reported, and that its full-year profit was expected to be in the red.

The company's stock price fell $140 from a peak of $333 per share amid the Fed's interest rate hikes and profit-free corrections, a 62% drop in market value in a single day, and the personal fortune of its founder and CEO Michael Thaler fell by $6.1 billion.

Michael Thaler argues that the company is simply spreading the revenue from large advances over a longer period of time.

MicroStrategy's plunge is one of the strongest proof of the volatility of internet and other high-tech stocks, as well as the dubious nature of the numbers that some companies have been reporting. The surprise news that a star company in the Washington area restated its financial results for the past two years has sparked investor anxiety about the technological revolution, with some fearing it could also be a speculative bubble.

'We think this is a wake-up call for investors who have bought internet-related companies,' said Jon Moody, a financial analyst at Scott & Stringfellow in Richmond. Maybe that raises questions about how we value these stocks. ’

The collapse of MicroStrategy also highlights investors' concerns about regulators and their growing sensitivity to internet companies.

Many companies incorrectly calculate their financial performance, exaggerating their successes. When a company needs to recalculate the results, the consequences can be catastrophic for shareholders.

'There's absolutely no fraud here, and there's no sign of fraud,' Mr. Thaler said in an interview yesterday, adding: 'I don't think investors have been misled.' ’

But Howard Schillett, who analyzes the state of corporate financial data for institutional investors, said, 'It's a nightmare for investors who rely on financial reporting. ’

Schillett's Rockville-based company has released two reports in recent months questioning MicroStrategy's financial reporting.

Analyst Burt Field said: 'I think they're kind of pushing the bottom line. ''Their classification of income is clearly more radical than others' ’

Securities and Exchange Commission Chairman Arthur Levitt warned about the company's financial statistics more than a year ago, saying: "Operating in a gray area between legality and blatant fraud...... Financial statistics have long been distorted."

According to Levitt, one of the main areas of distortion is premature accounting.

Last December, the SEC issued new guidance aimed at clarifying existing accounting principles about how companies should calculate revenue. Saylor responded that these guidelines prompted MicroStrategy's decision to reaffirm its results.

MicroStrategy has a market capitalization of more than $20 billion, and the company will be sold for $27 million at the bottom.

When BTC becomes popular, it will become the company that holds the most BTC in the world.

The collapse of MicroStrategy's market capitalization became a landmark event for the bursting of the Nasdaq bubble, and everyone was thinking seriously about it, and the Nasdaq was overvalued.

Previously, only some investors and economists believed so, but today, MicroStrategy, in particular, has seen its valuation plummet due to falsified financial data, which has led to a crisis of trust in Internet companies.

At the invitation of Zhou Xin, Bill Gates, Yang Zhiyuan, Gerard Levine and others have come to China to participate in the first Internet conference named "The Internet Changes the World".

Everyone is very interested in the Chinese market, which has a much larger population and great potential than Ameriken.

On the first day, after Zhou Xin's brief speech at the Internet conference in the morning, the summit session was held in the afternoon, and Zhou Xin could clearly feel that all the participants on the scene were worried.

Someone reported to Zhou Xin in real time on the news of the NASDAQ: "Boss, you are really amazing, our solid strategy based on the S&P 500 combined with the actual dividend and dividend situation has risen by more than 20% in the past week."

Now, from Wall Street to Silicon Valley, more and more investors are starting to wonder if tech stocks are really worth that much money, no, everyone.

Everyone is starting to get skeptical, and when I talk to my friends who work on Wall Street, they're already thinking about moving to mature stocks in traditional industries. Warren Jensen's voice was full of excitement on the phone to Zhou Xin.

As the manager of Zhou Xin's asset management company, his remuneration is highly linked to the company's efficiency.

The general direction of the strategy was formulated by Zhou Xin, but the specific stock selection was done by him and the company's professional investors.

Before the bubble bursts, many people know that it is a bubble, but whether it is a bubble or not, it can rise without brains.

This is the same as the brainless rising sector in Big A, even if you know that Big A's listed companies don't have this technology, AI is really the future, and Big A's listed companies will eat some cake crumbs at most.

But there's no way you have to buy shares of these companies for the sake of performance, revenue, and profits.

It's the same thing with the NASDAQ.

But Zhou Xin is different, after Zhou Xin and Time Warner completed the settlement, after paying taxes and getting $45 billion in cash, half of it was set to a stable direction dominated by S&P 500 index stocks.

As for why not short the NASDAQ, because before the bubble burst, Zhou Xin couldn't grasp the time, and he brought huge changes to the entire Internet market.

In particular, the success of Quora, and its business model have greatly pushed up the NASDAQ index, and Zhou Xin does not dare to guarantee that the bubble will really start to burst in 2000, just like the original time and space.

As a result, the time was earlier, and the NASDAQ bubble burst earlier and landed faster.

Of the $74 billion in cash, only $46.62 billion was left after paying taxes, and the relevant fees had to be paid to Goldman Sachs, and finally $45 billion was in hand.

Their stock selection strategy has risen 20% over the past week, and by 30% over the past three months, which means that the stock market alone has gained $6.7 billion.

Zhou Xin said: "Continue to maintain our focus on the NASDAQ market. ”

The sharp fall of the Nasdaq is not a sharp fall now, it has been transmitted from the other side of the ocean to China.

Internet entrepreneurs who were able to get investment are now almost impossible to get money from Ameriken's investment institutions.

Huaguo Internet companies, which are listed on the NASDAQ, are also facing a plunge in market value.

All the participants are affected by the overall environment.

Even so, the dialogue session between Bill Gates, Yang Zhiyuan, Gerard Wright and Zhou Xin in the afternoon still attracted attention.

The fact that they can't get investment and the market value has fallen sharply doesn't affect their desire to hear the views of the bigwigs.

"Before the start of the Internet conference, the organizer asked me who would be the host of today's event, and I thought about it, there were already four of us here, plus a host, it was a bit crowded.

So I said, no, it's good for me to be the host myself, it's nothing more than to liven up the atmosphere, which I'm good at. "Zhou Xin is Gerald Wright on the left, and Bill Gates and Yang Zhiyuan are on the right.

"Here are Internet practitioners from all over the world, and everyone must be very concerned about what the future of the Internet will be, what I need to do when running a business, and what can meet the development of the times and the needs of users."

(End of chapter)