News that WorldCom hid billions of dollars and inflated earnings shocked many Mississippians.
The Clinton-based telecommunications company admitted June 25th that it had failed to follow generally accepted accounting principles and would restate financial statements for 2001 and the first quarter of 2002.
“Our senior management team is shocked by these discoveries,” said John Sidgemore, who was appointed WorldCom CEO in April. “I want to assure our customers and employees that the company remains viable and committed to a long-term future.”
Headlines from around the country were not as optimistic: “WorldCom Says Its Books Are Off By $3.8 Billion, U.S. Criminal Probe Reported.” “WorldCom discovers massive alleged fraud.” “ANOTHER ONE: Massive fraud reported at WorldCom.” “WorldCom hid $3.85B.”
Compounding the situation, industry analysts are anticipating a bankruptcy filing, and layoffs are imminent.
And although this story is just one more big-business-gone-bad story in other parts of the country, for many of us, it’s a very personal loss. Friends and family are likely to lose jobs. Savings for college or retirement have been wiped out. And the little Mississippi company that could, whether it was LDDS, WorldCom or whatever, probably won’t ever again.
Investing on emotion rarely works out. But with WorldCom, Mississippi wanted to believe. Last week’s headlines — and a share price around 20