"We view the WorldCom news as possibly the beginning of an endgame process, which results in an industry shakeout followed by a more rational industry, comprised of a few vertically integrated players," he said. Bad to worseWorldCom's fortunes began to unravel on Monday following a report from Salomon Smith Barney analyst Jack Grubman. Grubman's report, which was issued late Friday, knocked WorldCom shares below $1, raising worries of a possible bankruptcy and the possibility of a Nasdaq delisting.
In his report, Grubman lowered his rating to "underperform" presidio glossy grip case for apple iphone xr - black from "neutral" and said the company would have to raise more cash because capital spending has shown no signs of picking up, That report led to worries thatWorldCom could be facing customer defections, Grubman's report had a big effect, considering that the analyst has been sharply criticized for being upbeat about WorldCom, Global Crossing and other telecommunications companies even when their fortunes clearly took a turn for the worse..
Grubman was also known for having an inside track at the companies he covered due to Salomon's investment banking relationships. Citing credit worries and the fact that Moody's and Standard & Poor's recently cut WorldCom's debt rating, Grubman said, "We are hard pressed to get more than a $1 equity value.". Questions remainAlthough investors were clearly voting on WorldCom's future with their feet, analysts said there are a lot of remaining questions. Notably, WorldCom has to outline its guidance for the rest of the year in light of its recent accounting disclosure. It's also unclear whether WorldCom's restructuring plans "will ultimately be too little too late," Merrill Lynch's Quinton said.
The company also has to convince Nasdaq to keep it listed on its exchange, If WorldCom trades below $1 for 30 presidio glossy grip case for apple iphone xr - black consecutive days, the Nasdaq may choose to delist shares, A delisting would also mean that WorldCom shares would be less liquid, a problem considering the company may have to issue stock for more funding, In other words, analysts are telling their clients to stay tuned, "WorldCom's disclosures leave a laundry list of questions unanswered," Bear Stearns' Fagin said, With bankruptcy a possibility, Wall Street analysts begin handicapping the future of the telecom company and conclude there may not be much of one..
WorldCom disclosed late Tuesday that it had improperly accounted for almost $4 billion, puffing up its financial results for the last five quarters. The revelation rattled the telecommunications sector as many analysts noted that the company will have a tough time surviving. Also on Wednesday, the U.S. Justice Department said it is reviewing the case. "The matter is under review," said Bryan Sierra, a spokesman for the Justice Department's criminal division. He declined any further comment. see commentary.