PCCW bought HKT for $38B and the stock fell 96% in three years

PCCW was founded by Richard Li, the younger son of Hong Kong tycoon Li Ka-shing, as a dot-com holding company during the tech bubble. In August 2000, at the peak of the bubble, PCCW acquired Cable & Wireless HKT — Hong Kong's dominant telecom operator — for $38 billion, financed largely through bank loans. The deal turned PCCW overnight from a small internet venture into a major telecom company, but it was financed at exactly the wrong moment.

The dot-com bubble burst within months of the acquisition. The debt burden from the HKT purchase became crushing as revenue failed to meet projections. PCCW's international joint venture with Telstra, Reach, also struggled. By 2003, the stock had fallen from HK$129.25 to HK$4.7 — a 96% decline — making PCCW the worst-performing blue chip on the Hong Kong Stock Exchange for two consecutive years. Cable & Wireless cashed in its PCCW stake, worth $5 billion at the time of the deal, for just $1.9 billion.

Richard Li spent the next decade trying to restructure the debt and stabilise the business. A 2009 attempt to privatise PCCW was blocked by Hong Kong's Court of Appeal after allegations of vote-buying. The company eventually shifted its focus from telecom to infrastructure and media, but the 2000 acquisition remained the defining event that nearly destroyed it. PCCW never returned to its 2000 valuation.