Sept 75 puts are pretty cheap right now at $2. If stock closes at 70 or below in next 5 weeks, you double $. It is likely to see short term downside volatility with issues outstanding like what MCI has.
Brand damage is usually measured as a % of market cap when the whole thing has been sorted out. You can expect this issue to hurt MCI WCOM brand as the reporters (who love to write about angry customers) put this in Wall Street Journal, USA Today, CNBC, etc.
Credits given to customers from outages may impact earnings. Here is a quote from a customer:
"We are very upset because MCI WorldCom has only been feeding us happy stuff instead of telling us what is
really going on," Sprouse said. "We have had customers
tell us that they may go out of business because of this."
If you could sum up the total business lost by the CBOT and ask WCOM to reimburse, if WCOM says no, then it goes to court and WCOM will be stuck in a lawsuit with one of its own customers. If an atty bundles this with others then you'll see a class action lawsuit, but for most large losses, it will be more effective for customers to sue individually rather than piggyback and share settlements.
"Market users worldwide depend on Project A around the clock, and MCI WorldCom has let them down for one full week. As a result of MCI WorldCom's failure to deliver on their promises to me early last week, the CBOT is pursuing all available remedies," CBOT President Tom Donovan said in a statement. |
