It was the boom that promised to make millions rich – yet five years to the day from the peak of the dotcom fervour, investors are still counting the cost.
Investors thought they could earn endless amounts of money from technology stocks, until the realisation dawned that most of the companies had yet to deliver and the bubble began to burst.
Many companies whose value soared to astronomical levels are still to make a profit and the experience has left many nervous about ploughing into the sector again.
Famous names such as lastminute.com and telecoms equipment group Marconi are now a far cry from their previous values, while ISA investments based on technology stocks were reduced to virtually nothing.
The UK’s techMARK index of technology shares now stands at about 1180 points after hitting a high of 3387.37 exactly five years ago, just months after it was launched.
The boom and bust of the tech sector was mirrored by the FTSE 100 index of the country’s leading shares, which only recently managed to crawl back above the key 5000 level and is still far off its peak of almost 7000.
One darling of the dotcom boom was internet auction site QXL Ricardo, which was worth £1.5bn (€2.2bn) four years ago before the technology bubble burst.
Investors paid £650 (€933.20) for each share of QXL at the time of its flotation in 1999, and recent takeover offers have still only pushed the price back up to £15 (€21.50).
And shares in online travel firm lastminute.com, which joined the stock market five years ago on Monday, are also far off the peak that followed the high-profile stock’s flotation.
Recent events such as the flotation of internet search engine Google have been reviving interest in tech stocks across the Atlantic, although many experts say investor confidence is picking up at a slower rate at home.
Hilary Cook of Barclays Stockbrokers said: “I think we have already seen a tech boom in the United States – the Nasdaq has had a very good run – but the problem is we (in the UK) don’t have many quoted tech companies any more.
“We haven’t had the basic technology stocks, the Intels, the Apple of Microsoft, to really benefit from the return to favour.”
She said the only thing on the UK market at a technological level was pharmaceutical companies, with accountancy software group Sage the only technology stock in the Footsie.
“The environment is massively more favourable but only if the companies want to come to the market,” she said.
“It’s not that fashionable to go for quotes again. It’s a lot easier just to find a private equity backer, of which there’s no shortage.
“It will come back in due course but it won’t be like it was five years ago.”
Richard Hunter, head of UK equities at stockbroker Hargreaves Lansdown, said he did not believe there would be a repeat of the tech boom.
“I think it will be a case of once bitten twice shy,” he said. “If you look at the constituents of the Footsie compared to 2000, we are back to the old economy of banking and oil stocks.”
He added: “In terms of the approach the market had to tech stocks five years ago, I don’t think we will see that again.”
In March 2000, a group of 10 technology stocks joined the FTSE 100, but by the following December only three – Celltech, Capita and Amersham – remained.
The techMARK was launched in November 1999 to create opportunities for technology-based companies. All of its companies are listed on the main market of the London Stock Exchange.
It now includes firms such as Shire Pharmaceuticals, Cable & Wireless, BT, AstraZeneca, Amstrad, BAE Systems and Marconi. Its latest recruit was Scottish pharmaceuticals company Ardana, which joined earlier this week and raised £71m (€101.9m) through its flotation.