Bad News Continues ... WorldCom announces massive accounting error

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  Bad News Continues ... WorldCom announces massive accounting error

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Author Topic:   Bad News Continues ... WorldCom announces massive accounting error

Chris Stallings posted 06-26-2002 10:45 AM CT (US)

Hre we go again ... another audit client of Andersen admits to shady accounting practices ... WorldCom will probably end up in bankruptcy ... a fall which would be much, much bigger than Enron.
Does this signal an end to investor confidence in US accounting practices and reporting transparency? How far do 401K plans have to decline before the public demands some tougher reforms?

billsw posted 06-27-2002 09:28 AM CT (US)

The fall may have a parachute. The US government (especially the military) uses WorldCom for a huge amount of its communications (voice and data). WorldCom assets also make up a significant potion of the backbone of the Internet. Turning these services off would have a huge negative impact.
georgeq posted 06-28-2002 09:44 AM CT (US)

Chris you may have another company joining the list today. Xerox has admitted to accounting issues as well. I am of the opinion that even more companies are still out there in a similar situation. Any thoughts on Oracle or Cisco being next?
cindy_randall posted 06-28-2002 03:25 PM CT (US)

Congress has also asked some former WorldCom executives to testify under oath. Bernie Ebbers the former CEO is one of these executives. Was he involved in the accounting issues? Will he now have to invoke the 5th amendment as Ken Lay of Enron did? Also, why did they ask an analyst from Smith Barney to appear?
robster posted 07-02-2002 09:23 AM CT (US)

The analyst from Smith Barney kept touting the stock to trusting investors as the ship was sinking. The day *before* WorldCom announced the accounting errors he changed his rating to "sell".
I'm not sure about if Oracle is a candidate for an announcement. But Cisco certainly is one - and 3M and AOL Time Warner could be as well. The real secret is that IBM may also have a few skeletons lurking in its closet (remember they were reporting great earnings while everyone else was turning to toast?). The NYT has been questioning some IBM transactions with JDS Uniphase.
EDS has also got to be feeling so heat from all this - WorldCom is a big customer and they stand to lose megabucks in contracts.
Today you can buy shares of WorldCom, the second largest US telecom provider, for only .06 cents each. But you better hurry if you want to throw your money away - WorldCom may be delisted from NASDAQ as early as this week. Just like the Enron employees, the WorldCom employees are seeing their retirements turned to vapor in their 401k accounts as this stock melts away.
Chris Stallings posted 07-08-2002 11:29 AM CT (US)

** July 8th Update **
Expected to testify before the US Congress today at 1:00pm ET are WorldCom Chief Executive Officer John Sidgmore, Chairman Bert Roberts, Salomon Smith Barney telecommunications analyst Jack Grubman, and Melvin Dick, once a senior partner at WorldCom's former auditor Andersen.
Former Chief Executive Bernard Ebbers and former Chief Financial Officer Scott Sullivan's ``attorneys have both notified us that they would exercise their constitutional rights and take the Fifth Amendment this afternoon,'' Rep. Michael Oxley, chairman of the committee, said on ABC's morning show ``Good Morning America''.


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Author	Topic: Bad News Continues ... WorldCom announces massive accounting error
Chris Stallings	posted 06-26-2002 10:45 AM CT (US) Hre we go again ... another audit client of Andersen admits to shady accounting practices ... WorldCom will probably end up in bankruptcy ... a fall which would be much, much bigger than Enron. Does this signal an end to investor confidence in US accounting practices and reporting transparency? How far do 401K plans have to decline before the public demands some tougher reforms?
billsw	posted 06-27-2002 09:28 AM CT (US) The fall may have a parachute. The US government (especially the military) uses WorldCom for a huge amount of its communications (voice and data). WorldCom assets also make up a significant potion of the backbone of the Internet. Turning these services off would have a huge negative impact.
georgeq	posted 06-28-2002 09:44 AM CT (US) Chris you may have another company joining the list today. Xerox has admitted to accounting issues as well. I am of the opinion that even more companies are still out there in a similar situation. Any thoughts on Oracle or Cisco being next?
cindy_randall	posted 06-28-2002 03:25 PM CT (US) Congress has also asked some former WorldCom executives to testify under oath. Bernie Ebbers the former CEO is one of these executives. Was he involved in the accounting issues? Will he now have to invoke the 5th amendment as Ken Lay of Enron did? Also, why did they ask an analyst from Smith Barney to appear?
robster	posted 07-02-2002 09:23 AM CT (US) The analyst from Smith Barney kept touting the stock to trusting investors as the ship was sinking. The day before WorldCom announced the accounting errors he changed his rating to "sell". I'm not sure about if Oracle is a candidate for an announcement. But Cisco certainly is one - and 3M and AOL Time Warner could be as well. The real secret is that IBM may also have a few skeletons lurking in its closet (remember they were reporting great earnings while everyone else was turning to toast?). The NYT has been questioning some IBM transactions with JDS Uniphase. EDS has also got to be feeling so heat from all this - WorldCom is a big customer and they stand to lose megabucks in contracts. Today you can buy shares of WorldCom, the second largest US telecom provider, for only .06 cents each. But you better hurry if you want to throw your money away - WorldCom may be delisted from NASDAQ as early as this week. Just like the Enron employees, the WorldCom employees are seeing their retirements turned to vapor in their 401k accounts as this stock melts away.
Chris Stallings	posted 07-08-2002 11:29 AM CT (US) July 8th Update Expected to testify before the US Congress today at 1:00pm ET are WorldCom Chief Executive Officer John Sidgmore, Chairman Bert Roberts, Salomon Smith Barney telecommunications analyst Jack Grubman, and Melvin Dick, once a senior partner at WorldCom's former auditor Andersen. Former Chief Executive Bernard Ebbers and former Chief Financial Officer Scott Sullivan's ``attorneys have both notified us that they would exercise their constitutional rights and take the Fifth Amendment this afternoon,'' Rep. Michael Oxley, chairman of the committee, said on ABC's morning show ``Good Morning America''.