| Popis: |
This thesis investigates the causes of an asset price reversal in the shares of British bicycle companies which occurred in the period 1895-1900. Hand-collected share price data indicate that cycle shares in this period more than trebled in value in the spring of 1896, but had lost 75 per cent of their peak value by the end of 1898. It is argued that these price movements are not fully explained by fundamentals, and were partly the result of an increase in speculative investment following significant technological innovations and high short-term profits at existing cycle firms. The high price of cycle shares was recognised by the financial press, but arbitrage did not occur because informed investors were either wary of cornering risk when short-selling, or found it more profitable to ride the bubble than to attack it directly. |
