Excellent analysis, but don't forget what I think was a highly underrated yet very important part of the bubble. This was the part that the bankers played the biggest role in. What they did was intentionally limit the market for any hot stocks. Remember that most IPOs were really limited, maybe 15% of a company was put up for sale. The remainder was kept in the pockets of the founders, the VCs, the managers, the banks...very little went to the public. I thought it funny to call a company "public" when only 12% of it was really controlled by the public. This retention of interest created a false market, one in which supply and demand was extremely skewed. A road show would be put on for a company and their names might already have been heard. People wanted the stock because they liked the idea AND of course they thought they could get rich on it. So limited supply drove the prices up by those 100% rises in day one of the IPO. Also people remember how they would intentionally be underpriced, to create that bubble from day one. In an oversubscribed offering you can easily raise the price, but the bankers didn't want to do that because a big pop on day one created buzz and even more demand. In a big picture sense of course no of it had any sensibility. If you were rich you would pay these outrageous aggregate sums for a mere piece of a company, yet if you have thousands of individuals clamoring for it the price is artificially high. This was a real travesty because these companies could easily have sold additional shares at higher prices and earned double or triple the capital to use for their businesses. Had some of these companies done that, they might have survived better and some of these companies would still be operating today. Greed was indeed the root of it, but simple economics would have explained the disconnect between reality, hype and supply/demand in the IPOs.