It was a special day for the employees of Nortel Galway. This was the first time a Vice President of the 90,000 strong Corporation had come to town. The year was 2000 and the Tech boom was in full swing. For months Nortel's share price had curved steeply upwards. The VP was TJ Fitzpatrick, head of one of Nortel's divisions.
There was a mood of excitement as the workers took their seats in the auditorium. A chuckle of laughter was heard here and there as the occasional wag cracked a joke about the Big Lad in town. One lad wondered if "TJ" knew that Galway had made it to the hurling semi-final.
Local management had prepared meticulously for their VIP. The room was set up like a glitzy media event - each side of the stage was emblazoned with the corporate logo; snazzy pictures of key products lined the walls; pzazzy music blared from the PA in anticipation. It felt like Nortel's version of New Labour. This was new Nortel. Old Nortel did telephones, new Nortel did Internet.
TJ was introduced to rapturous applause. Not that the crowd were in awe of TJ's achievements, but they were a well mannered bunch, and crucially the preceding year or so had seen the company dish out stock options to all and sundry. And boy had they risen. Each morning at the coffee machine, people talked about the share price. There was a very palpable feel-good factor. IT had taken off. Nortel was a key player. Employees felt their time had come. So TJ's visit had a buzz about it.
TJ derided disbelievers: "Some analysts ask how we can justify a price/earnings ration of 600". Pause, then in an Al Gore like lilt he continued "It's because we're building the high performance internet".
Anyone who knew that a PE ratio normally sits between 10 and 30 would have gulped. Either Nortel and the Tech boom had really found a new paradigm or something wasn't quite right!
In the months which followed uncle TJ and his boss, company CEO John Roth, continued to talk about the high performance internet. Roth said he expected sales to grow by 30%. Nortel would continue to eat up market share.
And then it happened. Reality came crashing through all the bullshit. Nortel had to admit that the arse had fallen out of its Market. It's sales projections had collapsed. The company suddenly discovered that the high performance internet was already built! No one need any more optical gear which they had turned into a core business.
The company's value on the Canadian Stockmarket fell from $398 billion dollars to $5 billion as the stock price plummeted from $124 dollars to ... 47 cents. A swath of Canadian investors and pension funds were wiped. And Nortel had to hand out p45's to some 60,000 employees.
Apparently Roth got out in time - he baled too that fateful year. But not before he could cash in $135 million of stock options.
Nortel's woes were to continue. In 2003 it was discovered that Nortel had been cooking the books. Billions of dollars had been improperly stated in its accounts and the company had to revise (down!) its positions back to 1998.
I never learned what became of TJ, but I'm full sure he didn't lose his pension. Roth retired to his estate in Caledon Ontario where he lay low enjoying his vast fortune - every penny of it hard earned from the high performance internet.