In the late 1990s, why were investors willing to pay high prices for start-up companies that had never made a profit, never produced a product, and had no real or financial assets?

Question

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Investors were willing to pay high prices for start-up companies in the late 1990s because of the high expected future cash flows. These companies were often in the technology sector and were believed to have potential for significant growth and earnings in the future. This led to a speculative bubble in the stock market, driven by investor optimism and a belief that these companies would continue to perform well, despite not yet having made a profit or having any tangible assets.

In the Late 1990s, Why Were Investors Willing to Pay