What are 'Siliconaires'

The term "siliconaires" is a slang term referring to young dotcom  entrepreneurs (particularly in the 1990s) who found themselves suddenly rich due to exercising stock options when their Silicon Valley tech companies went public at rapidly rising stock prices.

BREAKING DOWN 'Siliconaires'

With the dotcom boom and the overall increase in stock prices of many different high-tech companies, many fledgling companies in this industry went public via an initial public offering (IPO) and in many instances were able to raise large amounts of money without showing a profit or substantial revenue. Insiders who received employee stock options when their companies were private became instantly rich when their companies started trading publicly.

This peaked in 1999 when 457 companies went public, with 117 of them doubling in price on their first day of trading. Just two years later, only 76 companies went public and none doubled their price on the first day of trading. From early 2000 to late 2002, the NASDAQ Composite, where many of the Silicon Valley tech companies traded, dropped 78%. This helped reduce the value of the stock holdings of many of the siliconaires.

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