Bankruptcy Concern

Old May 10, 02, 8:04 am
  #1  
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Join Date: Mar 2001
Location: Gaithersburg MD
Posts: 81
Bankruptcy Concern


I was considering doing the switching back to MCI to receive some bonus miles, however, I am concerned that since now their stock is well below $2/share, the risk of a bankruptcy filng may be on the horizon. This in turn would place us as "creditors" if they would owe us mileage from an offer. Is anyone else concerned about this aspect, or would it be safe to go ahead and switch for the bonus miles?
TunaTacos is offline  
Old May 10, 02, 9:40 am
  #2  
 
Join Date: Apr 2002
Location: Syracuse, NY, USA
Posts: 111
Notice - I own MCIT shares

IMO, the bankruptcy issue is a non issue. Worldcom is cash flow positive and making a profit, albeit a declining one at this point. They are paying down the bond debt, and have little to no bank debt.
whistler is offline  
Old May 11, 02, 12:47 pm
  #3  
 
Join Date: May 2000
Location: Naples, Florida
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Whistler, is MCI and Worldcom the same?

If yes, read this:

Financial Times, May 11, 2002
By JENNY WIGGINS
WorldCom's deteriorating financial condition led Standard & Poor's to follow other ratings agencies and downgrade the company's credit to junk...
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Old May 11, 02, 1:32 pm
  #4  
 
Join Date: Apr 2002
Location: Syracuse, NY, USA
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Worldcom has two tracking stocks WCOM(WORLDCOM GROUP) and MCIT(WORLDCOM MCI GROUP). So yes.

I have given up on business reporters researching their own stories.

cons -
Bond debt on 27.9 billion spread over the next 29 years, a 2 billion accounts recievable facility. The SEC sent them a list of questions that Mr. Ebbers announced be for it was leaked. 167 million or so in remaining loans to Bernie Ebbers, of the original 355 million.

Pros -
1.6 billion+ cash on hand, 1 billion+ in free cash flow this year, less than 200 million in bonds due this year, 1.6 billion in bonds payable next year. They have reduced capex by 1 billion so the free cash flow will probably increase and they can still reduce capex by more than that if needed, currently 4.5 billion with a minimal need of about 1.8 billion). The neighborhood.

regards

[This message has been edited by whistler (edited 05-11-2002).]
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Old May 11, 02, 8:00 pm
  #5  
 
Join Date: Apr 2001
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At this point, I would be less concerned about MCI's financial health than that of the airline (whichever airline) I was going to acquire the miles in.

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Middle_Seat
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Old May 13, 02, 11:28 am
  #6  
 
Join Date: Apr 2001
Location: Los Angeles, CA
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<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by Middle_Seat:
At this point, I would be less concerned about MCI's financial health than that of the airline (whichever airline) I was going to acquire the miles in.

</font>
Very true. Plus, at MCI, you risk not getting 5 or 10K miles. With the airlines, you potentially have a lot more at stake...
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