Home     News     Features     Library     RTFM Store     Book     About    
  Top News
  Apple Supercomputer
  Larger iPods
  Andersen Linked To Fires
  Software Qality Study
  Ballmer Leaves Microsoft
  Oracle Teams with Mafia
  More News...

  Like this page?
  Like this site?
  Get the book
  Read reviews
  Support this site

  FREE newsletter
  Win FREE RTFM gear!

Web valleyofthegeeks.com

WhirledCom Bonds Cut

Sidd Finch
Sunday, June 09, 2002

Related News:

Cheaper By The Ton

Oops, I did it again!(Colossal, Miss.) In the past thirty days, WhirledCom has ousted CEO and founder Bernard J. Ebbers, laid off more than 3,700 employees, faced a federal inquiry into its accounting practices, been removed from the S&P 500 list, and seen its bonds downgraded to "junk" status. "And I'm just getting started," said newly appointed CEO John Skidmore. Skidmore is the former CEO of UUBet, the first commercial Internet service provider, a company WhirledCom acquired in 1994 for a bezillion dollars.

In the past five years, WhirledCom acquired more than 70 companies ranging from service providers, data providers, hosting companies and several Mississippi bowling alleys. "It was a hobby of Bernie's," Skidmore admitted. "After that Sprint thing fell through we had a bit of extra cash on hand. You'd be surprised how many bowling alleys you can get for a billion dollars." Skidmore needs to reduce the $28 billion in debt the company accumulated and jettison unprofitable businesses. "Luckily, bowling is a good business. The per minute rates are much higher for bowling shoes than for mobile phone services," Skidmore said.

Meanwhile, the SEC is investigating circumstances around WhirldCom's decision to loan Ebbers nearly $400 million to cover losses in his purchase of WhirledCom stock. "Of course, Bernie is a friend of mine, but it's not like I'd lend the guy $400 million from my pocket. Did he think this was Enron, or what?" Skidmore asked. "Still, when a company owes $28 billion, I think we can find a few people willing to keep this thing afloat."

Ebbers career included a stint as a high school basketball coach, motel operator and, of all things, a milkman. The latter experience appeared to be quite prescient, given the recent announcement of Ebbers' severance package. Ebbers will receive $1.5 million a year for life as well use of the company's fleet of aircraft. "I guess I milked this thing for all it's worth," Ebbers said to the press.

From Moody to Cranky

Meanwhile, Moody's Investment Services has lowered the rating on WhirledCom bonds from "A-" to "XXX" toxic junk. However, industry analyst Evan Elpus at BlightReading.com remained optimistic. "On the Environmental Protection Agency (EPA) Hazardous Materials scale WhirledCom maintains a solid 'B' rating," he said. "They're poised for a comeback. Especially if they can pull off a few more acquisitions," Clavinova said. "Juniper, 360 Networks, Qwest, EnteraSys, Enron, these are all great buying opportunities." Although many companies view a "junk" bond rating as negative, Elpus was quick to point out the benefits. "Hey, now they can stop worrying about selling bonds for 43 cents on the dollar on the secondary bond market. Now they sell this stuff by the ton at a combined Shareholder Meeting and Garage Sale. That's far more scalable," he said.

In separate news, WhirledCom announced they would not be exhibiting at the industry's upcoming telecommunications show SuperComm. "Forget SuperComm," Skidmore said, "with this meltdown, we can be the biggest SuperFund site the EPA has ever seen."

WhirledCom shares peaked in June 1999 at $60 a share and are currently trading at a ten year low of $1.35 plus 5 cents a minute after 8:00 pm.

About the author
Sidd Finch is a telecommunications industry reporter.  He is a supporter of the Lets Buy WCOM website.

Home     News     Features     Library     RTFM Store     Book     About    
Entire contents © Copyright 2002 - 2004 Z. Urlocker.  All rights reserved. No kidding.
All contents fictional and satirical.
RSS Feed