This actually happened in biotech in the last 15 years. Everyone bought into the promise of genomics and it all blew up (not genomics itself, but the idea you can make oodles of cash from it).
The biotech IPO window was almost closed from ~2000 to 2012-2013. Look at it now! Companies with nothing more than a promise raising $150M+ at IPO. I haven't kept track, but it wouldn't surprise me if close to 100 biotechs have IPOed in the last 2-3 years.
Don’t I know this. As someone who runs a genomics company that started in 1999 I have been through this whole experience. When I started people were literally giving me money for free and by 2001 you could not raise a cent even if you were profitable.
And the Nasdaq biotech index (NBI) has skyrocketed, from 1,000 four years ago, to a recent peak of 4,000 before the plunge (after having barely moved for a decade previously).
The biotech IPO window was almost closed from ~2000 to 2012-2013. Look at it now! Companies with nothing more than a promise raising $150M+ at IPO. I haven't kept track, but it wouldn't surprise me if close to 100 biotechs have IPOed in the last 2-3 years.