Is there anybody out there investors can trust? Wall Street was pondering
that today as markets were hammered following last night’s announcement that
WorldCom had inflated profits by a staggering $3.8 billion over the past
five quarters. The Dow skidded towards the 9,000 level, while the news
pushed the NASDAQ to near post-Sept. 11th levels.
The accounting slight-of-hand was accomplished by calling some ongoing
costs, like network maintenance, capital expenditures — a move that let the
company spread costs over several years, thus artificially improving cash
flow and profits. Now the company is teetering on the edge of bankruptcy. It
will cut 17,000 jobs, about 25 percent of the work force, by Friday, and CFO
Scott Sullivan has been fired over the accounting debacle. Also drawn in,
once again, are the beleagured auditors at Arthur Andersen, who were in
charge of monitoring WorldCom’s books.
Just two years ago the telecom was trading at $64 a share. Today, you could
purchase a piece of WorldCom for 21 cents. Nobody was buying, though, as the
stock didn’t even open for trading.
Over the past five years, TIME chronicled the rise and fall of WorldCom and
the man who built the company from a small Mississippi operation into the
second-largest telecom in the U.S., Bernie Ebbers. Complete coverage from
TIME, CNN and FORTUNE below:
TIME: The Rise And Fall Of Bernie EbbersA bar bouncer turned telecom billionaire, he’s now out of a job and $366 million in debt. But he still has faith
5/13/02
TIME: Bernie’s DealWorldCom makes a bold $30 billion stock offer for MCI in what could be the biggest takeover ever and establish the upstart as a rival to AT&T
10/13/97
CNN: WorldCom in Accounting Trouble
FORTUNE: Bamboozling: A Field Guide
