Sarbanes Oxley had very little to do with the web bubble but everything with fraud.
A bubble is related to valuing stocks for more than they're worth due to irrational expectations by the buyers of stocks, not necessarily fraud at the companies invested in.
In other words, you can have fraud without a bubble and vice-versa, SOX is mostly about good accounting practices, and corporate oversight and should probably be seen in the light of reducing the chances of companies overstating their revenues by 'creative' accounting practices without being caught at an earlier stage.
The internet bubble would have happened regardless of these rules and regulations being implemented at an earlier date, it might have collapsed later or slower once the investors realized that the internet wasn't going to be some kind of magical solution to all the worlds problems. Typically in a bubble you'll see prices go up and up and investors with little or no idea of what they're doing are lining up to buy stocks that have very little intrinsic value at prices higher than seems reasonable / responsible.
If the companies that they invest in commit fraud then that's going to make matter worse but a bubble can happen without any action on the part of the companies invested in, it is mostly an investor issue, fraud is mostly a corporate issue.
SOX compliance is also really expensive for smaller businesses, though, and it makes IPO's seem like a bad idea unless the company can be really, really huge. Companies with more than $5B in revenue only spent 0.6% of their revenue on SOX compliance, while companies with less than $100M spent on average 2.55%. This doesn't really have anything to do either way with a bubble, but it does disincentivize a company from going public.
A bubble is related to valuing stocks for more than they're worth due to irrational expectations by the buyers of stocks, not necessarily fraud at the companies invested in.
In other words, you can have fraud without a bubble and vice-versa, SOX is mostly about good accounting practices, and corporate oversight and should probably be seen in the light of reducing the chances of companies overstating their revenues by 'creative' accounting practices without being caught at an earlier stage.
The internet bubble would have happened regardless of these rules and regulations being implemented at an earlier date, it might have collapsed later or slower once the investors realized that the internet wasn't going to be some kind of magical solution to all the worlds problems. Typically in a bubble you'll see prices go up and up and investors with little or no idea of what they're doing are lining up to buy stocks that have very little intrinsic value at prices higher than seems reasonable / responsible.
If the companies that they invest in commit fraud then that's going to make matter worse but a bubble can happen without any action on the part of the companies invested in, it is mostly an investor issue, fraud is mostly a corporate issue.