Eugene David
...The One-Minute Pundit

Wednesday, February 09, 2005


HIGH FINANCE the POINTY-HAIREDLY BERNIE'S WAY:

[W]hile on the corporate jet in route to a Salomon Smith Barney conference in January 2000, Sullivan told Ebbers that WorldCom's revenue growth guidance for 2000 should be as general as possible.

Just say double-digit, Sullivan testified that he told Ebbers. If they pin you down, Sullivan added, stay with a wide range, like 11 percent to 14 percent,

Sullivan said he thought Ebbers understood the situation.

But just before Ebbers was to give his forecast to the analysts and large shareholders, an institutional investor told the CEO about a problem he had with WorldCom stock.

"The problem is your stock is a 'tweener," he said, according to Sullivan. "It isn't a high-growth stock with 15 percent-plus annual growth and not a slow-growth stock with revenue growth in the single digits."

Sullivan said Ebbers then mounted the stage and told Wall Street he expected WorldCom revenue to grow by 13 1/2 percent to 15 1/2 percent in 2000.

Shocked, Sullivan said he confronted his boss.

"Where did that come from?" Sullivan said he asked Ebbers.

Ebbers said nothing and just looked at the ground, Sullivan told the jury.

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