By editorial@silicon.com, 29 January 1999 16:43
NEWS Alan Greenspan, chairman of the US Federal Reserve has slammed Internet stock trading as a 'lottery'. Greenspan's statement follows an earlier warning to investors this week about the dangers of Internet share trading. Silicon.com reported yesterday on the allegations made by Arthur Levitt, US Securities and Exchange Commission Chairman. Talking to the US Senate budget committee, Greenspan said the recent surge in Internet-related stock prices was due to the system having a similar appeal to the lottery. He followed on to say that speculators are willing to pay excessive premiums, regardless of the odds, in the hope of winning stock otherwise seen as 'pie-in-the-sky'. Despite some small companies seeing stock prices shooting through the roof, Greenspan believes the majority will fail. There are expected to be 10 million US online broking accounts by the end of this year.
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