Chapter 1171: The Decline of Shitong

After a while, Kameda Masao came back with a smile on his face. In fact, as long as he accepts an interview, "Business Week" is very satisfied. Of course, it would be even better if Feng Yu could accept an exclusive interview.

Although Feng Yu did not accept an exclusive interview, Masao Kameda said that he would sell an exclusive breaking news to "Business Weekly".

Among the shareholders of "Business Weekly", there are also many wealthy people. They are well aware of how much profit such a news can bring.

So I made an appointment immediately, and tomorrow their people will fly to San Francisco to do an exclusive interview with Masao Kameda. If Masao Kameda 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 any longer and went back to work. The company is on the rise, so you can't be idle for a moment. Establishing a large advantage in the early stage of the company's development will make it much easier in the future. The company is preparing to launch an accelerated processor.

Only Feng Yu, Masao Kameda and Ralph were left in the office, and Ralph made three cups of tea. After following Feng Yu for a long time, he also felt that this kind of green tea, which tastes bitter but has an endless aftertaste, is very good.

Kameda Masao is an islander, and he likes drinking tea very much.

After Feng Yu took a sip of tea, he nodded in satisfaction. This tea... quite quenches his thirst!

Masao Kameda was actually a little anxious, but he could only be patient and drink tea with Feng Yu.

Feng Yu put down his teacup and asked, "Kameda, WorldCom, do you know?"

"WorldCom? You know. The second largest communications company in the United States, second only to AT&T. At its peak last year, WorldCom's peak stock price exceeded 180 billion U.S. dollars. But now after the Internet bubble, it seems that only seven It's about tens of billions of dollars. Boss, the company you mentioned that made false accounts, shouldn't it be WorldCom?"

As Masao Kameda said, he felt that something was wrong. It shouldn’t be. WorldCom is a bigger company than Enron, and it is also the largest Internet service provider in the world. Same, fell to the bottom. Then if no one buys it, then bankruptcy is the only way to go.

"That's right, it's WorldCom. The development of WorldCom is actually very interesting. If you look carefully at WorldCom's report, you can find that WorldCom is a company that is rapidly expanding in the Internet bubble. How did the company develop? Yes, through mergers and acquisitions. The funds for mergers and acquisitions are not earned by them, but through the issuance of shares and financing. In other words, WorldCom uses investors' money to expand..."

Every company that WorldCom acquired did not pay much in cash.

They are all controlled through equity replacement, either through the exchange of their own original shares, or through the exchange of additional new shares, so as to obtain sufficient controlling rights. Even the cash they paid, the vast majority, was raised through the issuance of new shares.

The advantage of this is that the manager's operating pressure is extremely light, and the blind expansion is carried out at low cost. This kind of behavior, in essence, is a kind of misappropriation behavior, which is difficult to bring benefits to the development of enterprises. 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, and ordinary investors will throw away stocks to cash out to avoid risks. However, WorldCom has always been "excellent" in the stock market, and a large number of bankers are supporting it. Instead of throwing away WorldCom's stock, stockholders continued to support the market, which made WorldCom's stock price rise further.

As a result, WorldCom, an enterprise, has grown from a billion-dollar company to an over 180 billion-dollar company in just a few years. Feng Yu remembered that in his previous life, the stock price of Shitong Peak was close to 200 billion U.S. dollars. 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 caused the market value of WorldCom to not be as high as in the previous life.

But the good thing is that although WorldCom's stock price has fallen, it has not fallen as fast as in the previous life.

Although the dot-com bubble was serious this time, the words of the CEO of WorldCom strengthened the confidence of stock investors.

Our goal is not to gain market share or globalization, our goal is to become the NO.1 among Wall Street stocks!

It is this sentence that makes the stock of WorldCom continue to be supported by investors.

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 130 billion US dollars!

This is the highest amount of mergers and acquisitions in history. Once successful, WorldCom will surpass AT&T and become the world's largest communication company.

It is a pity that the merger case was jointly attacked by anti-monopoly agencies in Europe and the United States. They believed that this would lead to de facto monopoly. All companies suspected of monopoly want to be split up, not to mention this one that wants to monopolize after merger.

After the aborted merger and acquisition case, WorldCom's vitality was seriously injured. As mentioned earlier, WorldCom maintains its stock price through continuous mergers and acquisitions. If they are successful, they will become the first in the industry and will naturally obtain extremely high profits.

But the merger failed, and the disadvantages of the previous mergers and acquisitions were reflected. If there is no merger and acquisition, new shares cannot be issued, and if no new shares are issued, WorldCom will not be able to survive.

When WorldCom was acquired before, there were high debts, which can be reflected by a set of data. There are more than 50 banks that have lent more than 100 million US dollars to WorldCom. And WorldCom is contacting to continue the loan. They discussed with some banks again, and planned to find 25 banks again, with loans exceeding 2.5 billion US dollars.

Without loans, they would not be able to operate. At this time, the company's debt ratio is already seriously high. But those banks still had to lend him money, otherwise the previous loans would not be able to be repaid.

At this time, in order to maintain the stock price and continue to attract investors, they had to take risks and use accounting "tricks" to inflate profits, so as to create an illusion that the company is still profitable.

However, the difference between WorldCom and Enron is that WorldCom's fake account amount is higher, and the amount of one fraud is higher than that of Enron for many years. No way, the market value of WorldCom is much higher than that of Enron, and it also pays more.

After Feng Yu told Masao Kameda this, he took over from Ralph the results of his secret investigation by Ralph.

"Here, this is the evidence."

Masao Kameda looked at Feng Yu in disbelief: "Boss, why did you think that WorldCom might be fraudulent financially?"

Feng Yu clicked on the column of the company's financial audit: "Look carefully, the audit company hired by WorldCom is the audit company of Enron!"

...