Chapter 1172 Another Scandal

Feng Yu calls Kirilenko and Fu Rongqi to sell WorldCom's stock short.

After Ralph used the "Business Weekly" to expose WorldCom's false accounting scandal, WorldCom would be completely finished just like Enron.

Three days later, a new issue of Business Week was published.

The boss of an investment institution on Wall Street is sitting on a chair after work, grabbing new business newspapers and business magazines to learn about the latest business information, just like every day.

He suddenly saw the cover of "Business Weekly", which was an Asian man.

This intrigued him so much that he opened this issue of Business Week first, which saved him a huge loss.

Oh, this is Masao Kameda, the president of Fengyu Holding Group. Isn't it said that Fengyu Holding Group is Feng's company? Hey, this Masao Kameda is still at the helm of the first listed company, and he is really a genius to be able to operate and list that kind of company.

Wait, what did you say in the end, Masao Kameda said, WorldCom's accounts were falsified?

He hurriedly flipped back, and there was indeed an article proving that WorldCom was fraudulent. The data above clearly showed that WorldCom had at least $4 billion in accounting problems, and that was $4 billion!

He immediately grabbed the phone on the table: "Throw away all the shares of WorldCom. No matter how much you lose, immediately, immediately!"

At the same time, many people who got the news are also selling the shares of WorldCom. Think about Enron's lessons learned from the past, and wait for WorldCom to turn around? Then wait for the stock of WorldCom to become waste paper!

The securities regulators in the United States have actually noticed WorldCom. The company's debt ratio is too high. The legend of small fish eating big fish is staged again and again, relying on loans and issuance of new shares. Now it is no longer a small horse-drawn cart, but a small horse-drawn train!

Today they also noticed an article published in "Business Weekly", which said that WorldCom provided a huge loan of 366 million US dollars to its CEO Ebbs, but Ebbs did not have any collateral. There is obviously a problem with this loan. It's Ebbers' pocket.

However, at the end of last year and the beginning of this year, WorldCom's massive engineering expenses for expanding its telecommunications system were not accounted for as normal costs, but instead were treated as capital expenditures. Such an accounting skill brought nearly three billion US dollars to WorldCom huge profits.

The profit of nearly one billion US dollars last year and the profit of about 300 million US dollars in the first quarter of this year are also non-existent. They actually lost a lot.

don't say anything else,

With a large amount of loans, the interest they need to repay every day is not a small amount, let alone their business is so-so, where does the profit come from?

If there is a profit, will they apply for a $2.5 billion loan from twenty-five banks again?

If other magazines broke the news, people would still wonder if there is something wrong with it? But if it was reported by "Business Weekly", everyone would instinctively believe it.

What's more, that piece of evidence is not evidence: WorldCom's audit company, like Enron, is also Anxinda.

In short, these two fraudulent account scandals have brought almost catastrophe to Anxinda. They were the top auditing companies in the world before, but now, no one dares to hire them.

If Anxinda was invited, wouldn't others suspect that their company also made false accounts? Even if you prove it, others may not believe it.

The day after the "Business Week" broke the scandal, the US Securities and Exchange Commission announced an investigation into WorldCom's past mergers and an investigation into the company's $366 million loan to Ebbers.

And they immediately sued WorldCom for civil fraud. Those fake accounts need to be investigated in detail, and there may be more than that.

And Xiaobu, who is visiting abroad, is very furious. This is the world's largest Internet provider and the second largest long-distance telephone company in the United States.

As soon as he took office, the dot-com bubble exploded, causing the U.S. economy to decline, and he was in a state of distress. As a result, the good economy of the previous predecessor was completely an illusion, and it was all hyped up by these unknown companies.

If there were not companies like Enron and WorldCom, would the Internet have such a big bubble? Why is he in such a mess now? In order to develop an economy, looking for cooperation from countries everywhere, this president is too aggrieved!

WorldCom's credit rating was quickly adjusted to the lowest level. This level is considered a loan, and it has already been said that this company is going to be ruined!

At the same time, the twenty-five banks that originally planned to loan 2.5 billion US dollars to WorldCom also jointly sued WorldCom for fraud. Falsely inflating profits to defraud them of loans.

WorldCom's stock price plunged faster than Enron's. It also shows that investors are already very nervous about things like fraudulent accounts.

However, within a few days, several auditing companies investigated again, and WorldCom had two wrong accounts. The previous proofs of Masao Kameda were all proved to be true. The accounting problems of WorldCom have increased to Nearly eight billion dollars!

The stock price of WorldCom plunged rapidly, from 70 billion US dollars some time ago, it has shrunk to 20 billion US dollars, and it is still falling rapidly.

Everyone formed a concentrated selling, and many people's stocks could not be sold at all, but WorldCom's stock price kept falling because of this.

WorldCom quickly replaced the new CEO, but it didn't help. Although the new CEO claimed that they had negotiated and obtained about two billion dollars in financing and would continue to provide high-quality services to customers, no one believed it at all.

Now that the punishment decision facing WorldCom has not yet come out, WorldCom's stock price has fallen all the way, and has already fallen below the issue price.

It is even lower than the real value of WorldCom. After all, WorldCom still has a lot of fixed assets. Not enough to cover the debt.

Therefore, WorldCom filed for bankruptcy protection faster than Enron.

Feng Yu and the others bought Worldcom's stock in time to close their positions. This time, they made another small profit. If it weren't for WorldCom's own high debt ratio, they should have earned more.

This time, Masao Kameda and Ralph also made a fortune. At the same time, some shareholders of "Business Weekly" also made a fortune. It was also their participation that made Feng Yu and the others unable to short-sell the new WorldCom stock.

But it doesn't matter, "Business Weekly" sent an invitation to Feng Yu, inviting Feng Yu to become its independent director, and even promised to sell part of the equity to Feng Yu.

To put it bluntly, those shareholders all want to establish a relationship with Feng Yu, and hope that next time there will be such a profitable business, Feng Yu can bring them along!

And what Feng Yu didn't expect, the scope of the fake account scandal began to increase.

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