Nortel was worth $250 billion and a third of Canada's stock market — then it went bankrupt

Nortel Networks, a Canadian telecom-equipment maker, was once one of the most valuable companies in the world. At the peak of the dot-com boom in 2000, its market value reached about $250 billion, and it accounted for roughly a third of the entire Toronto Stock Exchange. It was a symbol of the technology boom and a national champion.

When the dot-com bubble burst, demand for telecom equipment collapsed and Nortel's revenue fell off a cliff. It also had to restate its earnings after it emerged that executives had manipulated the accounting to smooth and inflate results. Nortel restated 2000 through 2003, the SEC opened a formal investigation, chief executive Frank Dunn was fired for cause, and the company paid $2.47 billion to settle a class-action suit and $35 million to settle the SEC's charges. In 2008 Canadian authorities arrested Dunn and two other former executives on fraud charges.

Nortel never recovered. Weighed down by debt, a huge pension deficit, and a failure to keep up with competitors, it filed for bankruptcy on 14 January 2009 — days before a $107 million interest payment came due — in one of the largest corporate bankruptcies in history. The company was broken up and its assets, including a valuable patent portfolio, sold off. Nortel became a cautionary tale about the fragility of a boom-time valuation, the damage of accounting manipulation, and the danger of a single market bet.