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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: H James Morris who wrote (138382)	2/2/2002 11:06:15 AM
From: Oeconomicus	Read Replies (2) \| Respond to of 164684

Cover? Try "bail from". No. Actually, considering their reduced guidance, I thought mid-teens was fairly priced for WCOM for now, but that, longer-term, is was a decent holding. The valuation is modest and their growth will resume... eventually. The first day of freefall was driven by completely false rumors on the day when "everthing with a footnote to its balance sheet" was also in freefall. Three rumors - that Goldman was downgrading, denied by Goldman; that S&P was downgrading the debt, denied by S&P; and that S&P was taking it out of the 500, also denied. The second day was the margin call story. They're still apparently saying he won't have to sell his stock, but frankly, I don't care if he loses all his shares. What bugs me is that WCOM is likely going to bail him out AGAIN. The company guaranteed his loan from BAC and also loaned him $80 million a year ago so he could cover some of his debt and get BAC to make/extend the bigger loan. Now, BAC seems ready to call on that guaranty and WCOM will have no choice but to pay. And given their track record, they will probably just have him sign a new note. If/when the stock actually does recover, either he will have to start selling into the rise to repay the loan or the board will just forgive the loans - probably paying the taxes he'd owe as well. I'm inclined to think they should just call the loans and force him to surrender some of his stock if he can't come up with cash from somewhere else. I think most shareholders and most of Wall Street (except Grubman?) is tired of Bernie anyway and would cheer his departure. Bob PS: Like others this past week, the markets overreacted in WCOM's case too. A $183 million bailout of a CEO may be outrageous, but for WCOM's finances it is a drop in the bucket. JMO.