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After a while, Kameda Masao came back with a smile. [△网WwW.] In fact, as long as he accepts an interview, "Business Weekly" will be very satisfied. Of course, it would be better if Feng Yu could accept an exclusive interview.
Although Feng Yu has not accepted an exclusive interview, Kameda Masao has said that he will sell an exclusive and breaking news to "Business Weekly". This news immediately made "Business Weekly" think of Enron, which recently went bankrupt.
There are also many wealthy people among the shareholders of "Business Weekly", and they know very well how much profit such a piece of news can bring.
So we immediately made an appointment. Their people will fly to San Francisco tomorrow to conduct an exclusive interview with Masao Kameda. If Kameda Masao hadn't said something was going on today, they would have wanted to come today.
Knowing that Ying Weida's matter was settled, Huang Jiansen didn't stay long and went back to work. The company is in a period of growth and cannot be idle for a moment. If you establish a big advantage in the early stages of the company's development, the future will be much easier. The company is preparing to launch accelerated processors.
Feng Yu, Kameda Masao and Ralph were the only three people left in the office. Ralph made three cups of tea and came over. After following Feng Yu for a long time, he also felt that this kind of green tea was bitter in the mouth but had an endless aftertaste.
Kameda Masao is an island native and he likes drinking tea very much.
Feng Yu took a sip of tea and nodded with satisfaction. This tea... is quite thirst-quenching!
Kameda Masao was actually a little anxious, but he could only be patient and drink tea with Feng Yu.
Feng Yu put down his tea cup and asked: "Keda, do you know about Shitong Company?"
"WorldCom? You know. The second-largest communications company in the United States, second only to ATT. At its peak last year, WorldCom's peak stock price exceeded US$180 billion. But now after the dot-com bubble, it seems that there are only seven It’s about 10 billion US dollars. Boss, the company you mentioned that made false accounts, couldn’t be WorldCom, right?”
As Kameda Masao talked, he felt something was wrong. It shouldn't be. WorldCom is a bigger company than Enron and is the world's largest network service provider. If there is a false accounting scandal, the stock price will not be as high as Enron. Same, hit rock bottom. Then if no one acquires it, then bankruptcy is the only way.
"Yes, it's WorldCom. The development of WorldCom is actually very interesting. If you look carefully at WorldCom's financial statements, you will find that WorldCom is a company that expanded rapidly during the Internet bubble. How did the company develop? Yes, it is through mergers and acquisitions. The funds for mergers and acquisitions are not earned by them, but through the issuance of stocks and financing. In other words, WorldCom uses investors' money to expand... "
Every company WorldCom acquires does not pay a lot of cash. It takes control through equity swaps, either by exchanging its own original shares or by issuing new shares, thereby obtaining sufficient controlling rights. Even the vast majority of the cash they paid was funds raised through the issuance of new shares.
The advantage of this is that managers have extremely light operating pressure and can blindly expand at low costs. This kind of behavior is essentially a money-making behavior, which is difficult to bring benefits to the development of the enterprise. But if the scale of his mergers and acquisitions is large enough to achieve a monopoly, then he will be able to make a profit.
Under normal circumstances, issuing additional stocks is equivalent to adding water to the wine. Ordinary investors will sell their stocks to cash out to avoid risks. However, WorldCom has always performed well in the stock market, and a large number of bankers are supporting it. Instead of dumping WorldCom's shares, investors continue to support the market, causing WorldCom's stock price to rise further.
The result is that WorldCom, a company, has grown from a company worth more than one billion US dollars to a company worth more than 180 billion US dollars in just a few years. Feng Yu remembered that in his previous life, WorldCom's peak stock price was close to US$200 billion. However, in this life, because Microsoft stock was dumped earlier by Feng Yu, Nasdaq did not reach the peak of the previous life, which also resulted in WorldCom's market value not being as high as in the previous life.
But the good thing is that although WorldCom's stock price fell, it didn't fall as fast as in its previous life.
Although the Internet bubble is relatively serious this time, the original words of WorldCom CEO gave investors confidence.
Our goal is not to gain market share or globalize, our goal is to become the No. 1 stock on Wall Street!
It is this sentence that keeps investors supporting WorldCom's stock.
But the turning point came at the end of last year.
At the end of last year, WorldCom wanted to acquire Sprint Communications, which is the third largest communications company in the United States. The acquisition amount was nearly US$130 billion!
This is the highest merger amount in history. Once successful, WorldCom will surpass ATT and become the world's largest communications company.
Unfortunately, the merger was jointly attacked by European and American antitrust agencies, who believed that it would create a de facto monopoly. They want to forcibly split up any company suspected of being a monopoly, let alone this one who wants to monopolize after the merger.
After the merger failed, WorldCom's vitality was severely damaged. As mentioned earlier, WorldCom has maintained its stock price through continuous mergers and acquisitions. If they succeed and become number one in the industry, they will naturally gain extremely high profits.
But the merger failed, and the shortcomings of previous M&A investments were revealed. Without mergers and acquisitions, we cannot issue new shares. Without issuing new shares, WorldCom cannot survive.
During WorldCom's previous mergers and acquisitions, there was a high amount of debt, as can be seen in a set of data. There are more than 50 banks that have loaned WorldCom more than 100 million US dollars. And WorldCom is in contact to continue the loan. They have discussed with some banks and plan to find 25 banks again to lend more than 2.5 billion US dollars.
Without loans, they would not be able to operate. At this time, the company's debt ratio was already seriously high. But those banks still had to lend him money, otherwise the previous loans would not be repaid.
At this time, in order to maintain the stock price and continue to attract investors, they had to take desperate risks and use accounting "little tricks" to inflate profits, thereby creating the illusion that the company is still making profits.
However, the difference between WorldCom and Enron is that the amount of WorldCom's false accounts was higher. One fraud was higher than Enron's amount for many years. There is no way, WorldCom's market value is much higher than Enron, and its expenses are also high.
After Feng Yu told Kameda Masao this, he took over from Ralph the results that he asked Ralph to investigate secretly.
"Here, this is the evidence."
Kameda Masao looked at Feng Yu in disbelief: "Boss, how did you think that WorldCom might have committed financial fraud?"
Feng Yu clicked on the company's financial audit column: "Look carefully, the audit firm hired by WorldCom is the audit firm of Enron!"
… (To be continued.) Mobile phone users please visit m.read for a better reading experience.