IP: : Meida Unspun: Scenes From a Meltdown

[David Farber <dfarber () earthlink net>]

-----Original Message-----
From: "Robert J. Berger" <rberger () ultradevices com>
Date: Fri, 19 Jul 2002 09:13:38 
To: Dave Farber IP <dave () farber net>,
   Dewayne Hendricks <dewayne () warpspeed com>
Subject: Meida Unspun: Scenes From a Meltdown

Meida Unspun
Scenes From a Meltdown
http://www.imakenews.com/mediaunspun/index000017945.cfm#a82740

OK, enough happy news, we now return to the usual doom and gloom. As
credited in CBS MarketWatch, the Wall Street Journal broke the story
yesterday that WorldCom may be mere days from a
bankruptcy filing. The New York Times and Reuters joined the
Journal today with stories based on no-name informants. (The Journal used
variants of the phrase "people familiar with the
matter" eight times.) Each story mentioned that such a filing would be the
largest in history, dwarfing Enron's, on the basis of the declared value of
WorldCom's assets. The Journal reported that analysts question whether the
company's holdings are worth anywhere near the $103.8 billion the company
claims. 

Moving along the bankruptcy pipeline, the Associated Press reported that
Congress may investigate claims of Global Crossing shredding documents
before and after its Chapter 11 filing in January. The AP story, carried in
SFGate and elsewhere, noted the company's assertion that "none of the
(shredded) documents was relevant to pending lawsuits or investigations."
Uh-huh, just a coincidental shredding party by the aide and the son-in-law
of Joseph Perrone, whom the AP identified as Global Crossing's EVP of
finance "and a former Arthur Andersen partner."

At the far end of the bankruptcy pipeline was 360networks, which went
Chapter 11 last summer and has now filed a plan to emerge. The Seattle
Post-Intelligencer noted that the plan turns over control of the fiber-optic
net builder to a few secured lenders at the expense of bondholders and
stockholders, who stand to lose nearly $1.5 billion. Well, somebody has to
pay. 

Finally, a report from some quarters of the industry that are not (yet)
operating under court protection. The L.A. Times summarized a clutch of
earnings reports in the telecom sector. Nokia alone saw healthy profits,
which grew by 46%. Nortel reported losses that in most seasons might be
characterized as "staggering" -- from $320 million to $700 million,
depending on which costs are excluded -- but which were in line with
analysts' expectations. Level 3's business continued its precipitous
decline, and the L.A. Times noted that Legg Mason Wood Walker rates its
stock a "sell." Sprint lost money to the tune of only $63 million in the
quarter, and the stocks of its two operating units actually rose a smidge.
The report concluded with a Legg Mason analyst's caution: "It's still ugly
out there." Meltdowns are like that. - Keith Dawson

WorldCom Nears Chapter 11 Filing As Cash Reserves Continue to Fall
http://online.wsj.com/article/0,,SB1027021528753675760,00.html

Report: WorldCom bankruptcy imminent (CBS MarketWatch.com)
http://tinyurl.com/qek

WorldCom Bankruptcy Filing Is Said to Be Set for Next Week
http://www.nytimes.com/2002/07/19/business/19TELE.html

WorldCom may file bankruptcy next week (Reuters)
http://news.com.com/2100-1033-944843.html

Congressional committee examines document destruction at Global
Crossing (SFGate, AP)
http://tinyurl.com/qef

360networks plan stiffs bond- and stockholders
http://seattlepi.nwsource.com/business/79239_360networks19.shtml

360networks' plans turn domestic (Reuters)
http://news.com.com/2110-1033-944823.html

Losses Pile Up at Battered Telecom Firms
http://www.latimes.com/technology/la-fi-phoneearns19jul19.story


-- 
Robert J. Berger - Internet Bandwidth Development, LLC.
15550 Wildcat Ridge Saratoga, CA 95070
408-882-4755 Fax: 408-490-2868 rberger () ibd com http://www.ibd.com

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