WorldCom Tells A Tale Of Stunning Stupidity

from the not-looking-good dept

I didn't post the news of Worldcom's stupendous $80 billion writedown last week, because any news coming out of Worldcom these days just seems to ridiculous to bother with. However, this article looks more closely at the news to suggest it's a sign of further problems for the whole telecom industry. Much of the writedown was expected, but the fact that Worldcom wrote down their hard assets - stuff they paid cash for. People expected the writedown on their stock purchases and other intangibles. However, they weren't expecting to find out that all their equipment was worth a fraction of what they paid for it. That's likely to be true for everyone in the industry, and the article suggests we should expect similar writedowns from all the other major telecom players. Basically, everyone overbought during the bubble years, and now much of that equipment is sitting around useless. That's bad news for telecom companies, and worse news for those that supply them with equipment.
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  1. icon
    Mike (profile), 17 Mar 2003 @ 7:39am

    Re: Not just the value of the kit...

    Excellent points that weren't covered in the article, but are probably very accurate.

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