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Strategies & Market Trends : Zeev's Turnips - No Politics -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (88757)	7/1/2002 12:23:32 AM
From: Smart_Money	Respond to of 99280

Interesting Memo regarding WCOM ---- Original Message ---- Date: Thu, 27 Jun 2002 08:36 -0500 (CDT) From: "Fieldus, Trevor" To: Guy Pence , John Hintzen , Juliane Smith , Leonard Piazza , Michele Francis-Stine , Susanne Harland Importance: high Subject: IMPORTANT: Ron Beaumont call Team, Ron Beaumont has just held an EMEA all hands conference bridge to update us on the current situation. Below are the highlight bullets from what he had to say: WHAT HAPPENED * he confirmed that a routine internal audit found the line cost error in the financial statements. This was reported to KPMG and Scott Sullivan/David Myers prepared a statement of why they did this over the weekend * KPMG heard the explanation and determined that it was against standard accounting principles and that a restatement of our financial statement should be made * The board were aware of this last Thursday and have worked quickly to understand the issues and co-operate with KPMG * The impact is to restate our costs and recalculate our profit. However, our cash position is the more important than our profit levels and we have a good cash position currently. WHERE DO WE GO FROM HERE * In terms of the 17,000 lay-off on Friday, he broke this out as follows (and yes I know that when you add the numbers up they come to more than 17,000): * c. 2000 will be contractors * c. 3000 will be attrition (resignations and leavers since January 1st 2002) * c. 5000 will be leaving as part of our discontinued business and operations (eg. Wireless Resale) * c. 3000 will be from our consumer business (back office & customer service in residential and long distance areas) * c. 5-6000 will be from our business groups <<450-600 from International and the remainder from our back office functions>> * We will sell assets to reclaim further cash for the company: * real estate in DC, Pentagon City & Virginia will raise c. $200m cash * We will discontinue or sell some of our other operations: * NOT selling any networks or operations in Europe or Asia (except for potentially the Intel network in Japan) * WILL sell/discontinue Wireless Resale and foreign properties (eg. Embretel, MMDS, MKI etc) * The board are also spending time with the banks and lenders to continue discussions on lines of credit. The banks are supportive but are likely to want more difficult terms than previously on the table. * WCOM does not currently have sufficient cash to pay off all our debts. We do have enough to get us through to the end of 2003. We need to grow our cash flow by an incremental year on year figure of US$200m to ensure we can cover our debts going forward beyond 2003 * NASDAQ has ceased trading WCOM stock. They can only trade stock on companies that have audited financial statements. Our stock will not be traded until KPMG have reviewed, audited and released our revised financial statements. Expulsion from the NASDAQ probably cannot take place (nor can the clock start ticking on their rules for expulsion) until we are trading again * Chapter 11 is not yet an option. Bankruptcy in Europe is different. Here it means closing the company, selling the assets. Chapter 11 would remove our debts, but allow the company to continue trading under different ownership WHAT CAN WE DO * Focus on our customers. Communicate with them and build their confidence with us by our actions not words * Ensure we continue to deliver services at the highest level of competence and quality * Work as a team. help each other out by discussing the problems and supporting each other in these difficult times Apologies for the over long email, but thought you'd like to know what Ron has said. The call was recorded and lasted about 20 mins. As soon as I get a email with the replay access number, I'll email it out so that we can all hear the words first hand. Take care, Trevor Fieldus Senior Program Manager Global Enhanced Services UK USA +44-118-905-3019 Tel +1-719-535-1113 +44-118-905-3566 Fax +1-719-535-1638 +44-7887-755-311 Mob +44-7887-755-311 419-3019 Vnet 622-1113

To: mishedlo who wrote (88757)	7/1/2002 3:31:31 AM
From: LTK007	Respond to of 99280

link provided by Les Horowitz <<Domestic equity fund flows make it four-for-four bofasecurities.com >> reference to this being a slighty bullish indication i don't concur with, we need see more outflow,imo. Interesting Banc of America are now exclusively recommending TIPS. Max

To: mishedlo who wrote (88757)	7/1/2002 8:02:48 AM
From: Zeev Hed	Read Replies (4) \| Respond to of 99280

Mish, I am not sure that really applies to SLMC, the Yahoo data might be skewed, they show only 1.4 M in the float, but in the last six months insiders sold close to 10 percent of their holdings, so now the float must be closer to 6 MM shares. Second, the short position has peaked around 1.1 MM shares and is now declining for the last two months. Last, they went public last year, it is quite possible that some of the short was against the block as a hedging, maybe even by some insiders wanting to shift some of their sale to this year from last. The fundies don't look that bad. Zeev