One.Tel burned A$5.3B in market cap when overexpansion and cash burn caught up

One.Tel was founded in May 1995 by Jodee Rich and Brad Keeling, growing to become Australia's fourth-largest telecom with 2.2 million customers and a peak market capitalisation of A$5.3 billion in November 1999. The company had high-profile backing from the Murdoch and Packer families, who together injected A$710 million for a 40% stake in February 1999.

The company burned through cash on aggressive expansion. It spent A$523 million on Australian spectrum in March 2000 and announced a plan to build a European GSM network with Lucent Technologies that would have cost up to US$10 billion. In FY2000 One.Tel reported a loss of A$291 million while its founders each took A$6.9 million in bonuses.

By January 2001 Merrill Lynch predicted the company would run out of money by April. News Corp and PBL agreed to a A$132 million rights issue at 5 cents per share in May 2001, then reneged when further financial problems emerged. Administrators were appointed on 29 May 2001, and 1,400 employees were laid off from June 2001. The company had been insolvent since March 2001.