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rhynerapologist 12/4/2012 | 10:11:48 PM
re: Is It Too Late to Rescue WorldCom? "Hey Perry, where are you today! On June 27! We're here waiting for your responses!"


That's just evil.

In a good way.
Scott Raynovich 12/4/2012 | 10:11:57 PM
re: Is It Too Late to Rescue WorldCom? Hey Perry, where are you today! On June 27! We're here waiting for your responses!
Scott Raynovich 12/4/2012 | 10:26:01 PM
re: Is It Too Late to Rescue WorldCom? It's so insane that their bonds were downgraded to junk on 5/10
gely 12/4/2012 | 10:26:37 PM
re: Is It Too Late to Rescue WorldCom? Ebber's strategy was to build out as much fiber as possible, and being the CEO for 17 years makes him totally responsible for what happened under his tenure, 90% of the fiber World Comm has in the ground is unused, I give him credit for being ahead of the times, but ultimately all of the unused fiber is going to cost the company its future. Bye Bye World Comm!
cfaller 12/4/2012 | 10:26:40 PM
re: Is It Too Late to Rescue WorldCom? perry1961 wrote:
"Where [analysts] are being deceitful(downright lying imo) is when they'd have us believe bonds MUST BE retired when due. More often than not, these bonds are simply refinanced."

Refinancing bonds isn't as simple as making change for a dollar. Everything gets renegotiated, and everything gets reappraised. In addition to probably having to pay out a higher yield, WorldCom's assets aren't worth as much as stated, and they will have to write down assets to get a financial institution to buy out their old bonds and back their new bonds.

Since WorldCom will have to write down their asset value, they won't be able to borrow as much against it. With less money coming from the refinancing, they won't be able to cover all of the old debt with the new debt, which means they have to come up with the money from somewhere else.

NOBODY knows where WorldCom will come up with the extra money, and that is the real problem...
New_guy 12/4/2012 | 10:26:44 PM
re: Is It Too Late to Rescue WorldCom? I wonder if these unnamed experts and other pundits will be as energized about admitting their mistakes in a month or two when Worldcom has cleared up any doubts about bankruptcy.
perry1961 12/4/2012 | 10:26:44 PM
re: Is It Too Late to Rescue WorldCom? I could understand if these "doubts" were about Worldcom's ability to make interest payments on its debt,but that isn't the case.
You see,the pundits know Worldcom is cash flow positive,profitable,and reducing debt.They also know any "potential" problems are years in the future.Where they are being deceitful(downright lying imo)is when they'd have us believe bonds MUST BE retired when due.More often than not,these bonds are simply refinanced.
Only Worldcom is expected to have enough cash in the bank today to pay off bonds due years from now.
What other company has this impossible standard?

I'd really like to know.Can someone name one?
perry1961 12/4/2012 | 10:26:45 PM
re: Is It Too Late to Rescue WorldCom? "Several years down the road, thereG«÷s no way theyG«÷ll be able to pay down all their debt," says a financial observer who has asked to remain unnamed.

No wonder he wanted to remain unnamed,LOL.What would happen if GE had to "pay down all their debt" due THIS year? In a word...bankruptcy.

These pundits are telling us that since WCOM may not be able to entirely retire bonds due in 2005,we should assume bankruptcy now.Companies roll over debt every day,so why is WCOM singled out for this treatment?
The part about WCOM possibly drawing down credit lines to threaten banks is also complete garbage.They have the cash to retire this AND next years debt.And,being cash flow positive....I can't believe the company is being trashed like this.
Capex was cut in half this year in order to maintain profitability.In a worse case scenario,WCOM has stated it can cut capex in half again.
That's right,profits! A p/e under 4.
You people are unreal...
anonymous 12/4/2012 | 10:26:46 PM
re: Is It Too Late to Rescue WorldCom? You refer to the startups hanging their hats and hopes on Worldcom's Capex.

I wonder about large customers that an implosion would affect; like the US government, or AOL which outsources something like half of their dialup (AOL doesn't actually own their own modems) from WorldCom subsidiaries.

Do you think the government would let things get very ugly before they decided to "lend a hand"?

Hmmmm.
BackSlash 12/4/2012 | 10:26:46 PM
re: Is It Too Late to Rescue WorldCom? Worldcom's fate does have a large effect on the entire industry. Not to make any comparisons (ENRON) with other companies which have recently died... I think that the new CEO will try to cut and sell out of the areas which don't turn a profit in the SHORT term.. (aka Nortel mode).. No long term plans for network changes.. (big $$ changes).. but if a startup could come up with something that makes use of current network topology / properties and make it easier to run / manage / change ... well .. there you have it..

Comments are: I will not re-invent my network.. Make my network work better with what I have or prove to me that if I use your stuff, it will save me huge in cap / opex...
\
netgenius 12/4/2012 | 10:26:49 PM
re: Is It Too Late to Rescue WorldCom? Worldcom is in dire straights....but what about the startups hanging their hats and hopes on Worldcom's Capex?
skeptic 12/4/2012 | 10:26:53 PM
re: Is It Too Late to Rescue WorldCom? Ebbers' strategy -- aggressive acquisitions to build out the WorldCom network in anticipation of a demand that never materialized
------------

That was NOT Ebbers' strategy. The strategy
was aggressive acquisitions to drive up worldcom's
stock price. The fundementals of the telecom
business were not something he was ever interested
in.



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