"Oh how you have forgotten that CEO's and CFO's were sued and chased out of office for having LESS than rosy predictions back in the 90s."


indicates a big problem with the current wall street modus operandi. got to march to the wall street drummer.


"You can't have it both ways."


want some semblance of honesty not cheeleading.


"To think WCOM really has a lot of bearing on the economy is crazy."


mi amigo what troubles me is how many more are goin to come to light.


"The stock was already under a buck and everyone knew the only reason why it had any value was the hope that people would be foolish and buy up its parts for too much."


agree with you. actually it had just fallen to under a buck again. it fell to under and then traded above in the hope that some financing would come thru. my opinion is that ignorant speculators were just doin that speculatin. i went on message boards and warned company had no equity value but people do what they are goin to do.


" I am heavily involved in these types of issues in my job and you don't "find" $4 billion misplaced in capex, that is just stupid. I personally think there is a lot more to this that you will never find out. There is no way in hell, I repeat, no way in hell they just "found" it. My guess is that they were playing on the edge with their capex/ordinary expense line, which all companies in this type of field will do."


good points seems to indicate orchestrated fraud to me. i dont think WCOM is the only company that is guilty of a scam like this.


"This business is all about investment for future revenue so it becomes a judgement call."


when company "cooks the books" hard to make good judgement call.


"That is the nature of the market, you take risk whenever you buy a publicly traded company. You can claim Ebbers and Co defrauded you all you want, but I don't buy it. You made him do it with your demands for earnings."


agree with you somewhat however fraud is wrong and should be punished. if an investor buys a companies stock or bonds he should at least be confident that the "books aren't cooked" dont you agree? if not how can an investor make a reasoned assessment. in another post at a some later date ill mention why i think much of the nineties stock market runnup was a ponzi scheme.


"Now that Ebbers was out, they had nobody fighting to keep the company afloat as it is."


and maintain the EBITDA fraud.


"After all they have $8 in cash flow a year, they could sit on that and be fine if it weren't for the debt load."


debt load incurred based on reported EBITDA (i know the lenders are as crazy as the people theyre lending too) and EBITDA based on fraudulent activities. not good.


" They come out and take anything that could possibly be construed as a "mistake" and take the hit for it. Creates a convenient mess that speeds up bankruptcy and gets it a good chance to wash its hands of a lot of worthless business."


ah but look at all the bond holders that are takin a big hit. good article in fridays wall street journal about the bond holders. massive losses there.


"They will emerge with a solid core of cash generating business and zero debt. Its so obvious to anyone with a clue."


issue is though banks lent them money and people bought their bonds based on "cooked books" as the wall street journal pointed out the potential liability of the investment bankers in issuing the bonds.


"The CFO was going to go anyways, he makes an easy scapegoat too. Only repercussion that could come out of it is that all telcom is going to get taken into the fire now. EVERY TELCOM COMPANY HAS ISSUES LIKE THIS!"


cost of capital goes way up and many seem to be over leveraged right now.


"Simple way to think about it. Lets say you own a toll road. Well you go out and build a new stretch of toll road. This is a 6-lane road that looks foolish for now because no one lives out there. You get almost no tolls. However you build it because you know three homebuilders want to build 15,000 homes at the end of your road. Here comes the situation at hand. You can expense this road, saying well we are going to earn SOME revenue right now, but not very much. Or you capitalize it and say we are really building this road for 5 years from now and the road is a long-term investment that we should write off over say 25 years. This is what telcom does. They make investments in wiring and networks that have vast future potential, but minor short-term potential. They could be considered either capital or ordinary expenses, but there is so much leeway in the rules as to what has to be one or the other type of expense that there are many situations you could argue for either one. For earnings perspective, capital is the far superior choice, you only take a small charge right now. However, the investor doesn't seem to realize that it makes no difference. You can take your hit now or later."


right but loans were based on phoney EBITDA. another issue with telecom is over capacity in wiring and networks. i think it all ties in to the dot com scam perpetrated by wall street.


"If he didn't get agressive with his accounting and try to gain a big share of the telcom market through big investments serviced by high-yield debt back when it was hot you wouldn't have invested and you would have abandoned him in Mississippi long ago."


i hope you mean "you" in generic sense. ive never owned WCOM stock or bonds. its all part of the problem with how wall street is in control of publicly traded companies. more on that at a later time.


"This one is all on the greed of the shareholders I am afraid. The numbers were all there for you, plain as could be. Maybe you got tricked by the analysts, small excuse, but people have to stop blaming others for their investment losses. This is a good example of it."


i agree but fraud is wrong and should be punished. investors do have a legitmate beef about "cooking books" i think.


"There weren't any real phantom losses, the earnings would have paid for it down the road."


not sure about that but its part of the risk your bare.


" I know a lot of people will disagree with me on this and maybe something else comes out of it in the future, but from the info I see now and the mindset of the investors of the late 90s, this is a great case to restate the obvious: STOCKS CAN BE RISKY..."


i agree. i find investing to be about getting compensated at a bare minimum adequately for taking on the risk. people came to think that stock market returns were always positive. theyve found out they were wrong and continue to do do. thank you for your cogent thoughts.