Financial Performance of Computer Network and Information Technology Services Companies in Bull and Bear Markets‪.‬

INTRODUCTION The information technology sector has transformed the economy and changed the basis of competition (Sampler, 1998). Information technology boosts the efficiency of the decision-making process and is perceived by many executives as an integral part of their business strategy (Molloy and Schwenk, 1995; Bartholomew, 1998). Investors have struggled to comprehend the potential and the limitations of information technology companies as the industry has continued to evolve over time. Not surprisingly, the volatility of stock prices for information technology firms has been extreme as many companies struggle to survive in the next few years after reaching a peak stock valuation. On March 10, 2000 the NASDAQ composite peaked at an intra-day high of 5,132 and declined to half of its value within a year before finding a bear market bottom on October 10, 2002 with an intra-day low of 1,108. The excessive rise and fall of information technology companies offers a unique opportunity to evaluate industry nuances associated with bear and bull markets.