Each day, Benzinga takes a look back at a notable market-related moment that happened on this date.
What Happened? On this day in 2002, telecommunications company Global Crossing filed for bankruptcy.
Where Was The Market? The S&P 500 traded at and the Dow Jones Industrial Average traded at.
What Else Was Going On In The World? In 2002, Kmart became the largest retailer ever to file for Chapter 11 bankruptcy. Former U.S. President Jimmy Carter was awarded the Nobel Peace Prize. The average median U.S. income was $42,409.
Global Crossing Goes Under: On Jan. 28, 2002, telecom giant Global Crossing officially declared Chapter 11 bankruptcy. Global Crossing was founded in 1997 and reached a peak dot-com bubble valuation of $47 billion. The company was founded by former Drexel Burnham junk bond trader Gary Winnick.
In only about five years, Global Crossing managed to spend $15 billion building fiber-optic networks around the world. In its entire existence, the company never turned a profit. In the fourth quarter of 2001 alone, Global Crossing reported a $3.4-billion net loss on revenue of just $793 million.
When the company declared bankruptcy in January 2002, it reported $22.4 billion in assets and a staggering $12.4 billion in debt, on which it was paying $600 million per year in interest.
Global Crossing emerged from bankruptcy in 2003 and once again went public. The company was purchased by Level 3 Communications for $3 billion in 2011 and is now a subsidiary of Centurylink Inc (NYSE:LUMN).
