WhyItDropped

Nasdaq · February 16, 2001

The day telecom orders vanished

-5.00%

single-day change vs previous close

Part of a longer stretch

Nine months down without a rest

near the end of it · 2000-07-17 → 2001-04-04, -61.66% over the whole period

What happened that day?

  • The Nasdaq fell 5% on the day
  • Large makers of telecom equipment said one after another that orders had collapsed
  • Through the late 1990s telecom companies had laid vast amounts of line on the assumption that internet traffic would keep exploding
  • Only a small share of the fibre actually laid was ever lit. The rest sat unused
  • When capacity is spare, nobody buys more. So orders at the equipment makers disappeared at once
  • This sector fell harder than the internet companies in the dot-com collapse and took far longer to recover

Sources

Every figure on this page is recomputed from the original daily closing prices and checked against them at build time. The account of what happened is written from the sources listed above.