The fact that even survivors consistently struggled

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The fact that even survivors consistently struggled and only 3Com prospered is noteworthy given recent acquisition of 3Com by Hewlett- Packard. The high return period for computer network and information technology services companies is more diverse than the low return period. Four of the five companies achieve their high return period in different eras, which demonstrations a high degree of performance differential across firms in the industry during a bull market. Nortel Networks achieves a high return period in the browser era. Cisco and Yahoo achieve their high return period in the Y2K era. The high return period for 3Com is the post-9/11 era. The high return period for Ericson is the outsourcing era. The variation in the high return periods across the five companies provides evidence the computer network and information technology services industry produces blockbusters. Items that are blockbusters tend to have one product or innovation that captures the attention of investors. The product does not have to be the most profitable item but investors normally consider the innovation to have strong potential for success. Industries characterized as containing blockbusters normally have low correlation with respect to price and stock market returns because product innovation is sporadic across the industry. CONCLUDING COMMENTS The purpose of this research is to compare the stock market performance of five companies specializing in computer network and information technology services across six information technology eras. The six period classifications are the browser era, Y2K era, post- Y2K era, post-9/11 era, outsourcing era, and mobile/wireless era. The statistical methodology incorporates a nonparametric Kruskal-Wallis test to compare the stock market performance of the companies in the research cohort. The primary data source is the Yahoo! finance website. The results of this study imply a high correlation of stock market prices for computer network and information technology services companies during bear markets but a low degree of correlation with respect to firms achieving their peak return period. Specifically, four of the five companies achieve their peak return period in different eras. The variation in the high return periods across the five companies provides evidence the computer network and information technology services industry produces blockbusters. One of the limitations of the study is a potential survivor firm bias, where companies that did not survive the stock market bubble burst of the post-Y2K or post-9/11 eras are not part of the study. This limitation is somewhat mitigated by the observation that companies that did not
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Page 96 Academy of Accounting and Financial Studies Journal, Volume 15, Number 4, 2011 survive almost certainly hit low periods in the post-Y2K or post-9/11 eras. A second limitation of the study is the application of stock market returns across a very broad timeframe encompassing 120 months. Traditional finance event studies usually focus on daily data for a very short window of time in order to minimize the potential contamination of other events.
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