Life in Austin

This is a story of how I lost a bunch of money, ~$12000 on TCL, Tata Communications Limited. Once  a high flier of the Indian ADRs, TCL was one of the biggest operators of the undersea cables. I bought it when it was relatively low priced at $11 in 2011, then for couple of years it went no where and in early 2011 it started to trend lower. On May 15, company announced that it was going to delist from the US ADR program. I was not aware of the news, but the prices started to fall, I looked at the finance.yahoo.com top news for then TTCMY, and there was no mention of delisting. Unaware of this when the price went down to $5.50 I bought some more. See, this is a huge company with billion dollar  valuation and a Tata brand behind it. So I never thought that the company would disappear, but it had a huge problem, it had a debt of 1.5 billion dollars. I still believed that one day when the indian Internet market matures all this infrastructure will pay off. Sadly that day never came, On Sept 10, 2013 company liquidated my all 2000 shares at the paltry rate of $2.50/share, even though the day the shares stopped trading in US was on Aug 2.

Few lessons to be learned here.

1. Investing in ADR needs extra attention, all the news from local markets does not make it to US news networks. 
2. When a company is getting delisted, SELL and run away from it, there are only more troubles ahead. 
3. Run away from companies that have a huge debt compared to their revenue.