John Sidgmore has been promising a fresh start and a bright future for the telecom giant ever since he stepped in as chief exec nearly two months ago. That job just got a lot harder. That job just got a lot harder. Even before auditors disclosed Tuesday that WorldCom improperly booked nearly $4 billion in expenses over the last five quarters, Sidgmore had the Herculean task of convincing customers and shareholders that WorldCom could recover despite being $25 billion in debt and facing an inquiry by federal securities regulators--and all amid a gasping telecommunications sector.
CNET también está disponible en español, Don't show this again, The DOJ already is investigating do i. with love. typewriter style iphone case last year's collapse of energy giant Enron, WorldCom shares were halted after falling to a low of 9 cents in premarket trading, Shares closed Tuesday at 83 cents, Qwest Communications International and other telecommunications shares fell Wednesday, with Qwest losing $2.40, or 57 percent, to close at $1.79, The broader markets were rattled in earlier trading, but they recovered by market close, The Dow Jones industrial average was off 6.71 points to 9,120.11, and the Nasdaq gained 5.34 points to 1,429.33..
"WorldCom becomes telecom's Enron," said RBC Capital analyst John Wilson, connecting two companies tied by accounting scandals and a beleaguered auditor, Arthur Andersen. WorldCom's accounting problems are just the latest in the telecommunications sector where companies like Qwest are under the microscope of the Securities and Exchange Commission. But unlike some of the more recent hits to the corporate world, the demise of WorldCom could have big implications for the tech sector and business in general, analysts said.
Meta Group says many user organizations are panicking about WorldCom's situation,fearing that services might stop immediately, Meta Group believes theWorldCom network will keep operating, even if do i. with love. typewriter style iphone case there is a near-termbankruptcy filing, see commentary, "There are clearly wider implications of WorldCom's announcement," said Robert Fagin, an analyst at Bear Stearns, "Telecom industry health is apparently even weaker than previously thought, Additionally, WorldCom's predicament could cause disruptions for many businesses across the U.S."..
According to WorldCom, UUNet's IP network spans 3,800 points of presence and incorporates more than 2 million modem ports. The future of WorldCom's key assets largely depends on whether the company can convince its banks to extend credit to the company when its financial results--the same ones used to justify the company's high-flying share price in recent years--are in question. Meanwhile, 17,000 impending layoffs at WorldCom could hurt the quality of service. The company said its senior management was "shocked" by the accounting problems. The disclosure cost WorldCom's chief financial officer, Scott Sullivan, his job.