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Dot.Com Fever
Monday April 3 2000
Reporter Tom Mangold
Producer Toby Sculthorp

Aroon Maharajh is one of the new breed of internet millionaires. Working from the shed in the back garden he devised a plan to showcase new musical talent on the internet and Music Unsigned was born. Just 18 months later, and now with a staff of 14 fulltime employees, the company is worth an estimated 60 million and he is planning to float later on this year.
Aroon Maharajh

Tom Mangold: "You're a rich man now?
Aroon: "Yeah, very rich on paper if you think that's what rich is. I mean you know, paper, call it what you like, it's nothing until you've got money in the bank basically.''

Joanna Lumley, aka Patsy, is another one who has succumbed to dotcom fever and thinks the internet is an absolutely fabulous invention. She is the public face of Click-mango, a natural health company selling vitamins and health products through their web site. Founded by 27-year- old Robert Norton and 30-year-old Toby Rowland, the top team raised a staggering three million pounds from investors in just eight days.

Joanna Lumley
Joanna said: "I think the internet revolution is going to have the most profound effect on everybody. I think this new system of buying and trading is going to be one of the most phenomenal turnarounds, just as television was the turnaround of the twentieth century - a completely new way of doing things.''

Scroll down for related links

But for others the internet and the dotcom revolution has not meant instant wealth but a rather painful lesson in the harsh world of financial wheeler dealers. Many small investors trying to ride on the internet roller-coaster are logging on to cyber chat rooms hoping to gleam "insider information'' on the latest dotcom cash cow. Instead they come across chancers and cheats who "pump and dump'' stocks and shares. These new financial cowboys spread false information, tip useless shares and "ramp'' up the prices of their own stocks before bailing out at the first opportunity.

Russell Ewins , a sophisticated full time day trader, has seen more and more small time investors log on to these web sites as internet mania has spread.

As the share prices rises, private investors are getting into it, they're getting in on the action. When it drops again the ramper has made his money because he's sold it at the top. Then it's left with the private investors holding the baby. It's okay these people giving the tips out, but they never tell you when to sell them

Russell Ewins
He said: "As the share price rises, private investors are getting into it, they're getting in on the action. When it drops again the ramper has made his money because he's sold it at the top. Then it's left with the private investors holding the baby. It's okay these people giving the tips out, but they never tell you when to sell them.

But it not just these small investors who will end up picking up the tab if the bubble bursts. Many respected economists are warning of a spectacular crash in the near future which could have far reaching implications for all of us as we rely on pension funds tied up in the "new'' economy stocks.

Professor Shiller, of Yale University, said: "A lot of people are depending very heavily for their retirement on the investment made in these companies.
Some people will have made out like bandits, the people who bought in during the rise and got out, other people who get in at the last will be hurt a lot

Professor Shiller, Yale University
Some people will have made out like bandits, the people who bought in during the rise and got out, other people who get in at the last will be hurt a lot. Some of the people that worry me the most are the people putting their retirement savings in the market, and you see people doing that feeling very confident that nothing can go wrong.''

As the value of many dotcom firms continue to plunge daily and others estimate as many as three quarters of all internet firms will never make a profit it would seem for many that the fever has already broken.

Related links:
First Tuesday (networking forum for E-entrepreneurs)

Motley Fool

Last Minute.com

Financial Times

Interactive Investor

Related News Stories

European Internet Fever Cools

Floating out of Favour

The BBC is not responsible for the content of external Internet sites


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 ON THIS STORY
Dot.Com Fever
Tom Mangold reports on Clickmango
Dot.Com Fever
3 young hopefuls look for investment in their dot.com idea

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