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Technology Stocks : WCOM -- Ignore unavailable to you. Want to Upgrade?

To: telecomguy who wrote (10476)	6/5/2002 5:00:56 PM
From: Thomas Walker	Respond to of 11568

This isn't exactly news, but it's official. Does anybody know how many wireless subscribers that WCOM has and will now sell - I couldn't find it in their annual report? I'd either guess that they would sell them to the carriers that they were reselling from or to an established reseller. It's not the time to get top dollar for the customers and it will affect their revenues (voice revenues would have been down about 12% last year if not for wireless, but were only down 6%, so they are selling a revenue stream that had been inreasing). CLINTON, Miss. (Reuters) - Embattled long-distance telephone and data services company WorldCom Inc. (NasdaqNM:WCOM - News; NasdaqNM:MCIT - News) said on Wednesday it will exit the wireless resale business and cut some jobs in that $1 billion unit. "Slowing market growth, intense pricing pressure and acquisition cash requirements have rendered WorldCom's position as a pure reseller unprofitable," said the Clinton, Mississippi company. WorldCom has been in the wireless business for more than five years, re-selling services from the top two carriers in each market. It initially entered that market as a first step toward becoming a facilities-based wireless carrier, but that ultimately did not materialize. The multi-month process of exiting the wireless resale business will begin immediately. The company said it has received interest from several major carriers. As it develops a plan to exit the business, some of WorldCom Wireless' 2,200 work force will be reduced while the remainder will continue operations in the interim period. USA Today reported on Wednesday that the company plans to cut 16,000 workers, or about 20 percent of its work force, in a move to cut costs and preserve cash.

To: telecomguy who wrote (10476)	6/5/2002 5:12:50 PM
From: Oeconomicus	Respond to of 11568

When the "run" starts, negatives compound negatives and create it's own negative --- and it's very hard to reverse the process. There is a reason for Wcom to be at $1.40 right now...uncertainty is killing the company and the share price. well, uncertainty (fear) has already killed the share price, but whether anything is actually going to kill the company is what the sellers are uncertain of (or certain, in some cases, though I am certain they are wrong). as either a famous Yankee President or a famous Yankee Manager might have said: "the only thing we aren't sure of is uncertainty itself." ;-)

To: telecomguy who wrote (10476)	6/5/2002 5:52:04 PM
From: tejek	Read Replies (2) \| Respond to of 11568

you are assuming those 16,000 employees were doing nothing but sitting around their arse...if they weren't, these cuts will hurt Wcom and their competitiveness in the market -- meaning more revenue/customer loss. You can't chop off 16,000 (on top of their cuts already done in the past year) and not have an adverse effect on their customers. First, there is no question that WCOM is lean. But with any organization even ones that are considered very lean, there is always some fat. Secondly, the 16k figure is the rumored number.......WCOM has yet to confirm it. We do know that 2.2k will lose their jobs when the wireless unit is sold but that is a major plus since the wireless unit is such a cash drain. Thirdly, the article said "up to" 16k......the number could be quite a bit less. And we already know that of that rumored 16k, 2.2k are with the wireless unit, leaving less than 14k that might be cut from the WCOM core. So the million dollar question as always is.....will these cuts be done judiciously & will it impact the top/bottom line today and tomorrow going forward. That's why they say when you buy stocks, you are buying both the company and its management. Sidgmore is supposed to be the guy who can do the cuts judiciously. Lets hope he's earned his rep the hard way. Besides, i imagine when the jobs start to go, the morale will continue to sink and the smart/quality employees may be exiting from Wcom not wanting to be caught short like the current KpnQwest employees. When the "run" starts, negatives compound negatives and create it's own negative --- and it's very hard to reverse the process. I have to believe the smart people have been leaving for most of the year......probably when the stock started going down. These job cuts may cause more negativity but if they do what they are supposed to do which is to bring stability to WCOM, then I would think that the "running" will stop. ted

To: telecomguy who wrote (10476)	6/6/2002 12:04:57 AM
From: BEEF JERKEY	Read Replies (1) \| Respond to of 11568

"you are assuming those 16,000 employees were doing nothing but sitting around their arse" Hey that's what I do when I'm at work, I thought everybody did that! LOL Thing is I don't agree that there are too many "unknowns". Maybe for some of these totally frozen analysts now on massive doses of Prozac because they had soo wrong for soo long have a warped point of view where everything is bad no matter what because obviously they can't see the forest for the tree's re: WCOM. WHAT WE KNOW: -We know that WCOM Wireless is gone. That's 2,600 employees less with savings of $200,000,000.00 year. Asset value ~ $700,000,000.00 -We know that layoff's are coming - I think 16,000 sounds wacked - maybe ~ 8 - 12 k with the wireless group. That should add ~ $600,000,000.00 minimum to EBITA - I also think the effect on moral will be minimized if most are contract employees -We know MCI and WCOM are to be rolled together - thats $800,000,000.00 in intergtroup allocation savings added to EBITA -We know that the MCI dividend is gone = $284,000,000.00 right to the bottom line -We know WCOM has EBITA = $7.1 to $7.5 billion and MCI $.9 - 1.1 billion EBITA -We know that WCOM still has the premier international and national data networks. -We know that there are customers of KPN and GBLX ( and others) looking for new providers of top line data services. -We know that there are many talented experienced IT engineers and technicians looking for work right now. -We know the $5 billion backstop is pretty much a done deal WHAT WE DON'T KNOW: -We don't know how much of a success the Neighborhood will be but I think it will add $2 - $3 billion to annual revenues. No analyst but Vic Grover even mentions this. It's a dynamite plan - end of story. -We don't when the bandwidth glut will become a shortage but we do know that Internet bandwidth usage still growing @ 80% per year - thats almost 600 % in three years with capex being cut back across the industry. I never did buy into that "anything associated with the Internet will grow exponetially forever" argument but obviously it is a huge, pretty much new, technology that isn't going the way of the buggy whip tommorrow either. These views swing from one extreme to the other when the truth is somewhere in the middle. Personally 10 years ago I didn't know what an Internet was - now I'm on it all the time. Its an integral part of business and whatever now and it's still growing with a bit of evolving to come yet. Most tech analysts must now be suffering psychological problems with high levels of guilt and confusion right now. This is likely why it's hard to find an original though amongst them. You can't trust a point of view like that. I seriously wonder if one reason the analysts are so constantly negative on WCOM is that their ego's can't take the blow it would be to be blatantly wrong once again! I give Vic Grover high marks because he seems one of the few willing to think on a rational original way in the face of overwhelming, run away, negativity.