Chapter 1171: WorldCom's decline

After a while, Masaru Kamata returned with a smile. In fact, as long as he was interviewed, Business Weekly was very satisfied. Of course, it would be better if Feng Yu could accept an interview.
Although Feng Yu did not accept an interview, but Masaru Kazuo said that he would sell it to Business Weekly, an exclusive news, this news, let Business Weekly think of Enron soon after bankruptcy.
Shareholders of Business Weekly can also have a lot of rich people who know how much profit they can bring with such a message.
So I made an appointment right away. Tomorrow, their people will fly to San Francisco and make an exclusive interview with Masahiro Kamena. If it wasn’t for Kazuo Kazuo’s saying that there was something today, they wanted to come today.
I knew that the affairs of Ying Weida had been solved, and Huang Jiansen did not stay much, and went to work. The company is in a rising period and can't be idle for a moment. In the early days of the company's development, a big advantage will be built, so the future will be much easier, and the company is preparing to launch an accelerated processor.
The office left Feng Yu, Kaida Masao and Ralph, and Ralph made three cups of tea. With Feng Yu's time, he also felt that this kind of entrance was bitter, but the green tea with endless aftertaste was very good.
Masako Kameda is an islander and he likes to drink tea very much.
After Feng Yuxi took a sip of tea, he nodded with satisfaction, this tea... very thirsty!
Masako Kameda is actually anxious, but he can only bear the temper and accompany Feng Yu to drink tea.
Feng Yu put down the teacup and asked: "Kameda, WorldCom, do you know?"
"WorldCom? I know. The second communications company in the United States, second only to att. At the peak of last year, WorldCom’s peak stock price exceeded $180 billion. But now it has passed the network bubble, it seems that there are only seven About tens of billions of dollars. Boss, the company you said to be a fake account, it would not be a WorldCom company?"
Masako Kameda said that he was wrong, but shouldn't it, WorldCom is a bigger company than Enron, or the world's largest Internet service provider. If this is a false accounting scandal, the stock price is not with Enron. The same, fell to the bottom. Then if no one buys, bankruptcy is the only way.
"Yes, it is WorldCom. The development of WorldCom is actually very interesting. You can see through the WorldCom report that WorldCom is a company that is rapidly expanding in the Internet bubble. How did the company develop? The merger is through mergers and acquisitions. The funds for mergers and acquisitions are not earned by them, but are financed by issuing stocks. That is to say, WorldCom uses the money of investors to expand..."
Every company that WorldCom acquired has not paid much cash. It is controlled by equity swaps, or it is exchanged through its own shareholding or issuance of new shares, so as to obtain sufficient controlling interest. Even the most of the cash they paid was raised through the issuance of new shares.
The advantage of this is that the manager's operating pressure is extremely light, and blind expansion is carried out with low cost. In essence, this kind of behavior is a kind of money-making behavior, which is difficult to bring benefits to the development of the enterprise. But if the size of his merger is large enough to achieve a monopoly, then you can make a profit.
Under normal circumstances, the issuance of stocks is equivalent to watering the wine. The average investor will throw away the stock cash to avoid risks. However, WorldCom has always been
excellent in the stock market
. There are a large number of bankers. The stockholders not only did not drop the shares of WorldCom, but continued to enter the market, which further boosted the share price of WorldCom.
The result is that the company, WorldCom, has grown from a billion-dollar company to more than $18 billion in just a few years. Feng Yu remembers that when he was alive, WorldCom’s share price was close to 200 billion US dollars. However, this world because Microsoft shares were thrown earlier by Feng Yu, Nasdaq did not reach the peak of past life, but also led to the market value of WorldCom, not as high as the previous life.
But the advantage is that although WorldCom's share price has fallen, it has not fallen as fast as the previous life.
Although this network bubble is more serious, the original words of WorldCom ceo have strengthened the confidence of the shareholders.
Our goal is not to gain market share, or globalization, our goal is to become no.1 in Wall Street stocks!
This is the sentence, let Shitong's stock continue to have stocks to come to the market.
However, the turning point appeared at the end of last year.
At the end of last year, WorldCom wanted to acquire the sprint communication company and sprint the communication company. It is the third largest communication company in the country, and the amount of the merger is nearly 130 billion US dollars!
This is the highest M&A amount in history. Once successful, WorldCom will surpass att to become the world's largest communications company.
It is a pity that the merger case has been attacked by the anti-monopoly agencies of Europe and the United States. They believe that this will create a factual monopoly. Any company suspected of monopoly, they want to force the split, let alone the monopoly that wants to merge.
After the abortion of the merger, WorldCom was seriously injured. As I said before, WorldCom has always maintained its share price through continuous mergers and acquisitions. If they succeed, then they will become the number one in the industry and naturally they will get a very high profit.
The merger can fail, and the drawbacks of those M&A investments are reflected. If you don't make a merger, you can't issue new shares, and you won't be able to issue new shares.
Before the acquisition of WorldCom, there was a high amount of debt, and a set of data could be reflected. More than 50 banks have been loaned to WorldCom for more than 100 million US dollars. And WorldCom is in contact and continue to lend. They have discussed with some banks and plan to find 25 more banks with loans of more than $2.5 billion.
If there is no loan, they will not be able to operate. At this point, the company's debt ratio has been severely high. But those banks have to lend to him, otherwise the previous loans will not be repaid.
At this time, in order to maintain the stock price and continue to attract investors, they have to take risks and use the "small skills" in accounting to inflate profits, thus creating the illusion that a company is still profitable.
However, unlike WorldCom, WorldCom has a higher amount of false accounts, and a fraud is more expensive than Enron’s years. No way, WorldCom's market value is much higher than Enron, and there are more expenses.
After Feng Yu and Kameida Masao said these things, he took Ralph’s hand and let Ralph secretly investigate the results.
"Give, this is evidence."
Kazuo Kameda looked at Feng Yu incredulously: "Boss, how do you think WorldCom may be financially fraudulent?"
Feng Yu points to the column of the company's financial audit: "Look carefully, the audit company that WorldCom invited is the audit company of Enron!"
... (to be continued.)