The crash of technology stocks and .com companies had little to do with the actual performance of the companies involved. Rather, they were the result of the overconfidence of investors who drove the stock price higher than the real value of the company. When the company did not live up to the almost impossible expectations of its investors, buyers were not willing to pay as much as was previously asked.
A company's stock price is theoretically based upon the sum of the future cash flows, in dividends and capital gains, which the company will distribute. The market generally uses earnings per share to estimate these future cash flows. However, the supposed future growth of .coms caused investors to abandon these criteria and bid on speculation alone.
Or take Amazon.com, the web-based purveyor of books, music, toys, and the like. Though a mere start-up, the company soon after birth rocketed to a huge, and precarious, stock market value of $20 billion. A company's value is usually considered to represent an estimate of the present value of its future profits, but here the company was selling for a multiple of its annual sales, never mind any profits. (Jenkins, 2003)
This artificial inflation actually made it difficult for the companies to get additional funding, because so much return was expected for each dollar invested (Jenkins, 2003). So the 2000 tech stock crash actually helped e-business, rather than hurting it, by allowing them to access the financial markets for funding again.
Jenkins, H. W. (2003). The New Economy's Sore Losers. 21+.
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