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Joe Nocera

Private Equity Ran Amok in the 2010s

The decade exposed an industry that cared about lining its own pockets, often at the expense of the companies it bought.

Cash for us, debt for you.

Cash for us, debt for you.

Photographer: SeongJoon Cho/Bloomberg

Twenty years ago, writing in Fortune magazine, I dubbed the 1990s “the Nasdaq Decade.” And why not? Practically from the moment the browser company Netscape went public, the tech stocks that dominated the Nasdaq stock exchange only went up. Cisco Systems Inc. rose 125,000% in the 1990s. Dell Technologies Inc. was up 72,000%. Shares of EToys quadrupled on their first day of trading in 1999. The Nasdaq itself rose 685%.

But a few months after the decade ended, the internet bubble burst, and by 2002 the Nasdaq had declined 78%. The tech highfliers  that had soared in the 1990s either went bankrupt or their valuations crashed back to earth.