Chapter

ManiaXFundamentals

Mike Fortun

in Promising Genomics

Published by University of California Press

Published in print February 2008 | ISBN: 9780520247505
Published online March 2012 | e-ISBN: 9780520942615 | DOI: http://dx.doi.org/10.1525/california/9780520247505.003.0016
ManiaXFundamentals

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In 2000, the year of deCODE Genetics' initial public offering (IPO), there were an estimated sixty-seven biotechnology IPOs and secondary offerings, which raised a total of $39 billion–$30 billion more than was raised in the previous three years combined. Was the great genomic run-up of 1999–2000 an instance of “financial euphoria”; a “speculative bubble” or a “mania,” in the tradition of the Dutch tulip mania of the early seventeenth century; the Mississippi gold (Banque Royale) or the South Seas bubbles of the early eighteenth century; or the speculative periods that preceded the stock market crashes of 1929 and 1987? Is the emerging genomic economy, after the precipitous decline that began in March 2000, still an example of “irrational exuberance” in the market? Peter Garber analyzes the rhetoric of bubbles, manias, “herding,” and panics in both the economic literature and in the popular media. The disclosure mechanisms of the U.S. Securities and Exchange Commission are one set of mechanisms that are worth experimenting with and worth improving.

Keywords: Peter Garber; Securities and Exchange; deCODE Genetics; financial euphoria; speculative bubble; mania; stock market crashes; irrational exuberance; herding; disclosure

Chapter.  1837 words. 

Subjects: Evolutionary Biology

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