Light Reading's Hall of Fame: The First Five
All told, Ebbers lost $100 billion in investor dollars and cost thousands of people their jobs before being sentenced to 25 years in prison for fraud and conspiracy.
The former high school basketball coach, who always preferred boots and cowboy hats to three-piece suits, built his original fortune acquiring Best Western motels in Mississippi, then got into telecom in 1983 by borrowing money with three friends to buy the company that they renamed Long Distance Discount Service (LDDS). From the outset, Ebbers had one strategy: growth through acquisition. LDDS bought more than 60 independent telecom firms to become an 11-state operation. But Ebbers was just getting started.
He burst into the telecom spotlight in 1996 with his $12.5 billion purchase of MFS Communications, and his crowning glory was a $40 billion merger with MCI to defeat a British Telecom takeover bid. Along the way, Ebbers, who is Canadian by birth, clung to his image as a Mississippi good ol' boy who still taught Sunday School, while personally buying Canada's biggest ranch, a minor-league hockey team, a yacht builder, and vast amounts of timberland, much of it using his Worldcom stock as collateral.
After a planned Sprint merger was scuttled, the telecom bust revealed to the world that Ebbers's claims of efficient integration were largely smoke and mirrors – at one point MCI Worldcom had 55 different billing systems. Hiding all that inefficiency were accounting methods that managed to count some leasing expenses as revenue while hiding losses. Investors were unaware of how bad things were – and so, Ebbers always claimed, was he.
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