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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (146905)	5/6/2002 11:48:00 AM
From: tejek	Read Replies (1) \| Respond to of 1574683

Tim, my mistake..........I thought he said play WCOM with options. ted ___________________________________________________________ WorldCom Hope Ebbs Thanks to Ebbers' Loan By James J. Cramer 04/30/2002 07:40 AM EDT WorldCom's (WCOM:Nasdaq - news - commentary - research - analysis) going with a whimper, not with a bang. Outgoing CEO Bernie Ebbers will now sell all of his stock, knocking this pathetic equity down even lower than it is. But the company isn't about to default right now. It still has too much cash. In fact, the speculator in me wants to buy some WorldCom stock on the big Bernie Ebbers print that is inevitably coming -- the one where he sells all of his stock to meet the big loan the board foolishly made him -- and then flip it when people realize that the stock is still a call on an ongoing enterprise, even if it is an enterprise that will default down the road if nothing changes. In short, WorldCom actually has breathing room. It can do some things to try to save itself before its ticking time bomb of debt goes off. (The first big payment on debt isn't due until next year. That's when the problems will really hit home unless WorldCom chooses to deal with them now.) Unfortunately, though, it can't tap the public markets for any more money. I just don't think it will give that money to them. It can sell pieces, it can split off parts, it can do whatever it can to flail and stay in business for a little bit longer. But let's be honest. This is the first enterprise I have ever seen that was sunk by a margin loan to the founder. That's what is really happening. This company has been paralyzed for ten points now as we all waited to see what would happen to the big loan and Bernie. Amazing, a true test of the capitalist system: a company wrecked by the founder's sheer personal greed. It's too bad. It was a decent business. Now it's just a business to be restructured. So play the upside. Scalp the point when the block trades. Then get ready to play the downside, because it's only a matter of time. This common stock is a true call option on a potential takeover only, and I don't see one happening. -------------------------------------------------------------------------------- James J. Cramer is a director and co-founder of TheStreet.com.