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Technology Stocks : WCOM
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To: mad dog from over there who wrote (9115)2/5/2002 10:04:46 PM
From: Rob S.  Read Replies (2) of 11568
 
"Real assets are probably 100 times the size of GX" Be specific. what "real assets" are you talking about. Where on the 10Q does that show up?

I don't think you are providing much of a conversation here. Just knocking this article and others like it won't cut it. Let's start out admitting a few things: WorldCom should take about the entire amount of goodwill on the books and just write that off. The goodwill is worthless, period. Then they should take a good portion of the accounts receivables and write that off. We know that many customers are either already out of business or in bad shape and the chances of ever collecting the entire amount are zero. WorldCom needs to at least take these measures to assure investors that they have removed the funny money accounting from the books. In case they haven't noticed, investors are discounting all that fanciful stuff. Investors want just the facts: what assets do they have that can turn revenue, not meaningless goodwill that was used to pump up the valuation of their investments during the bubble mania heyday.

While I don't agree at all with the authors $2.50 per share net tangible value method of determining the stock price (If I did would be like saying the NASDAQ should be at 400), I think that all the junk on WorldCom's financials just makes them look like a sham operation. Get it cleaned up and maybe investors will trust them and the stock will trade at a fair price, maybe around 12-14 by the end of the year. If they keep treating investors like they are pigs for slaughter, then I don't see how the stock can gain much respect.
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