Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : Elan Corporation, plc (ELN) -- Ignore unavailable to you. Want to Upgrade?

To: arnie h who wrote (2400)	6/25/2002 4:36:53 PM
From: Qualified Opinion	Read Replies (2) \| Respond to of 10345

arnie h, its more likely quarter ending window dressing. Furthermore, you can add a declining market with momentum trading. My average purchase price per share is $7.38. Time to average down. However, I will first wait for price stabilization. Rob

To: arnie h who wrote (2400)	6/25/2002 8:42:42 PM
From: Czechsinthemail	Respond to of 10345

Given the sharp drop following what seemed like pretty well known and digested news, I've wondered whether another shoe is about to fall and the analysis is just a coincidental factor in the drop. Fairly or not, the news of massive fraud at WorldCom may have a rub off effect on Elan. It comes at a bad time, and ELN may be presumed guilty until proven innocent. I suppose there is the chance that ELN will be viewed as "less bad" than others, but the market and the media seems to be in a tar-and-feather mood. Here is the WorldCom news: Reuters Finance News Report: WorldCom Engaged in Massive Fraud Jun 25 7:35pm ET NEW YORK (Reuters) - Telecommunications giant WorldCom Group Inc. has been engaged in a massive fraud, inflating its cash flow by about $3.6 billion over the past five quarters, according to a news report. Citing sources close to WorldCom's board of directors, CNBC reported that Chief Financial Officer Scott Sullivan -- who it said was fired over the past 48 hours -- inflated WorldCom's earnings before interest, taxes, depreciation and amortization, a measure of cash flow know as EBIDTA. The beleaguered telecom firm has been reporting as capital expenditures costs that should have been treated as ordinary expenditures, and is planning to restate its financial statements in the near term, CNBC said. Shares of WorldCom sank on Tuesday after-hours trading plunged to 36 cents per share on Instinet, down from a close of 83 cents on Nasdaq. WorldCom could not be reached immediately for comment on the report. "This is absolutely wrong," said Patrick Comack, an analyst Guzman & Co. who covers WorldCom. "This is shocking, it's mind-boggling. If it's true, it'd be hard for them to avoid bankruptcy." WorldCom has been in talks with its banks and they are aware of the alleged fraud, the report said. This new revelation will make it very difficult for WorldCom to raise any new money and they may have to file for bankruptcy, the report said. "I would assume the banks would do an about-face," Comack said, adding that WorldCom needs the credit line to meet its debt maturities next year. The report, if true, would be the latest in a string of troubles for the firm. It would also add to a larger crisis of confidence on Wall Street where some of America's biggest companies are under federal investigation for accounting fraud and management chicanery. An SEC spokesman declined to comment when asked if the agency was aware of the alleged financial fraud at WorldCom being reported by CNBC. In April, WorldCom said it may sell up to $2 billion in assets, including the wireless resale business, as well as its stakes in Latin American telecom companies Avantel of Mexico and Embratel of Brazil. Proceeds from any sales would be used to pare WorldCom's debt load, which totaled $27.9 billion at the end of the first quarter. The company last month said it would scrap its tracking stocks and dividend payments, saving $284 million a year. Analysts expect the company to cut its already reduced capital spending budget by another $1 billion to about $3.5 billion. WorldCom faces a regulatory inquiry into its accounting practices and personal loans it made to former Chief Executive Bernie Ebbers. WorldCom Group's stock was removed from the Standard & Poor's 500 Index, and credit ratings on its $30 billion in debt were slashed to "junk" status. The company is in talks to secure $5 billion in new funding to help restore investor confidence after its stock plunged 90 percent this year. It said expects to have the financing in place this month. siliconinvestor.com