Internet downturn: Finding valuation factors in Spring 2000

Elizabeth K. Keating*, Thomas Z. Lys, Robert P. Magee

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

39 Scopus citations


During Spring 2000, the Internet Stock Index declined 45%. Using a sample of internet firms, this paper investigates whether this decline was associated with new disclosures, such as earnings, analyst forecast revisions, and web-traffic measures, or to a "reassessment" by investors of pre-existing information. We find only modest evidence that the decline was associated with new disclosures. However, returns and post-decline stock prices are significantly explained by 1999 annual report data. When earnings are decomposed into gross profit and various expenses, traditional financial information contributes significantly more in explaining the cross-sectional returns and price levels than non-financial information.

Original languageEnglish (US)
Pages (from-to)189-236
Number of pages48
JournalJournal of Accounting and Economics
Issue number1-3
StatePublished - Jan 2003


  • Cash flow
  • Earnings
  • Internet firm
  • Stock option
  • Valuation

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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