system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5: The "Dot Com" Crash. What happened, When, How, and Why?
gpt
Imagine it's the late 90's or early 2000's. The internet started getting popular, and various internet company startups were born.  Some startups made money, some didn't, but it was a brand new world at the time. Imagine a time where the internet didn't exist, and then all of a sudden everyone started using it and discovering how useful it is.

Most of these startups didn't make money, but it didn't matter, because it was the chance for everyone to invest in companies from start. And that in the future, all these companies will be blooming and ruling the world.  Lots of hype around these companies, even though in reality most of them weren't making profits.

But in the world of stocks, as long as the stock price goes up, it means that you're making money.  So imagine there's a new startup company called pets.com. They are going to deliver pet food through online orders. Everyone was buying the hype for internet companies, so tons of people started buying shares of pets.com.  

All of a sudden, the stock price jumps from $1 to $2 in a span of weeks. Then in a few more weeks, it jumps to $4!  That means that if you had invested at $1, you would've made a 3x return in a matter of weeks!  These internet stocks are exploding!  Better hop on before the price gets too high.  So more demand drives up the price even higher.  It's sort of like herd mentality. 

All of a sudden, shares of pets.com are now sitting at $20/share, and people have invested billions of dollars into similar companies.  Then one savvy investor looks at the actual accounting figures, and they realize that pets.com is actually losing tons of money and not making any profits at all.  And now everyone is trying to sell their shares of pets.com as fast as they can, as well as other similar internet companies. 

That is the Dot Com crash.

TL;DR: tons of new internet companies were born, everyone thought it was the future, herd mentality drove up the stock price, and then when people realized most of the companies were useless, everyone tried to sell their shares as fast as they could.

Fun fact: there was an actual company that ran pets.com.  It lasted about 200-some days on the stock market.  Hitting over $11/share before crashing and selling for pennies.