WorldCom 분식회계 사례(영문)
분야
docx-Bernie and his Empire
-The Burst Bubble and Accounting Myths
-The Acquisitions, Expenses, and Reserves
We can say that WorldCom’s Wall Street ride was at least partially enabled by Mr. Ebbers’s personality and charisma. He was a charming, “native boy” who was making good. Even as the company stock was falling, few in Mississippi would let go of their stock because of abiding faith in Ebbers. His story was a rags-to-riches one of a basketball player growing an international mega-business. Actually his personal life did take some twists and turns. He divorced his wife of 27 yrs while WorldCom was at its peak and married again in 1998.
Mr. Ebbers was very good at buying businesses, but not so good at managing them. His employees referred to him as “the bank” because he was so distant in day-to-day management.
By 1999, Mr. Ebbers was ranked 174th richest American possessing $1.4 billion that he spent for example to offer himself a minor-league hockey team or a trucking company or to spoil his beautiful wife.
Consequently, he found himself heavily in debt with his personal investments, and in need for cash, he persuaded the board to allow WorldCom’s creditors to extend loans in excess of $415 million to him meaning that he put his company at risk of losing that amount.
If the price of the stock declined, and Mr. Ebbers did not meet margin calls, his creditors would be forced to sell the shares, among them, 27 million were possessed by Mr. Ebbers.
Despite those issues, Mr. Ebbers was “a wonderful corporate citizen”, he for example raised $500 million for the Mississippi College.
The Burst Bubble and Accounting Myths
Once the Justice Department refused to approve the final proposed merger with Sprint, WorldCom came unraveled. It resulted mainly from the burst in the dot-com bubble and the resulting decline in the telecommunications industry.
There was a 52.8% decline in employment in the telecom industry from 2000 to 2002. WorldCom could no longer sustain what had been phenomenal revenue growth.
When Enron collapsed, the
