Message boards, blogs, early Twitter democratized financial commentary. Anyone with an audience could move a market. The pump-and-dump went digital.
Netscape Communications went public on August 9, 1995. The offering price had been raised from $14 to $28 the day before. It opened at $71 and closed at $58.25. The day-one return was 108 percent. The company had no profits, was eighteen months old, and was giving its main product away for free. Morgan Stanley took it public anyway. The IPO is conventionally cited as the moment the internet became visible to mainstream finance — the moment retail investors began to look for the next browser, then the next portal, then the next search engine. Pets.com, Webvan, and the entire 1999–2000 mania trace directly to this day.
Lehman filed for Chapter 11 at 1:45 am Eastern with $639 billion in assets. By the time Asian markets opened a few hours later, every major trading desk in the world had read the filing in full, knew the counterparty exposures, and had started repositioning. The synchronized global response is the part that was new: it was the first major bank failure of the genuine internet era, and the speed of information reset what a banking panic could look like.
At 2:32 pm Eastern, a single large algorithmic sell order hit the E-mini S&P futures market. High-frequency traders, responding to unusual order flow, pulled their bids. The Dow fell nearly 1,000 points (about 9 percent) inside ten minutes and recovered most of it inside 20. The event revealed that electronic liquidity could evaporate instantly when algorithms decided, in concert, to step back. SEC rules on single-stock circuit breakers tightened later that year.
Over a single weekend, internet-driven rumors about Bear Stearns's liquidity became a self-fulfilling fact. Counterparties pulled credit lines between Thursday and Sunday. By Sunday night JPMorgan bought Bear for $2 per share, down from $172 a year earlier.