Silicon Valley Hears Echoes of 1999

Not many executives have seen their companies double in value in one day. Peter Bardwick has seen it twice. Bardwick was chief financial officer of financial news site MarketWatch when it started initial trading on Jan. 15, 1999, at $17 a share. By day’s end it hit $97.50, for a market value exceeding $1 billion. Fourteen years later, on Sept. 20, 2013, Bardwick, now CFO of digital advertising firm Rocket Fuel, watched its stock almost double in value on its first day of trading.

Amid such Day One stock pops, high valuations, and buoyant equity markets, warnings of an asset bubble are again echoing across Silicon Valley. Nasdaq’s 38 percent climb last year, and deals such as Facebook’s recent agreement to spend as much as $19 billion on fledgling messaging service WhatsApp, have added to worries about a crash like the one that sent the Nasdaq Composite Index plummeting about 80 percent from its March 2000 peak. By the end of 2004, 52 percent of dot-com startups that had sought venture capital—including investor darlings Pets.com and Webvan.com—were extinct, according to research by the University of Maryland and the University of California at San Diego.