• United States

MCI re-listed

Jul 14, 20043 mins

MCI’s stock this week began trading on the Nasdaq after a two-year absence.

MCI’s stock this week began trading on the Nasdaq after a two-year absence.

The carrier is trading under the ticker symbol MCIP. The carrier says the “IP” at the end of its ticker is a nod to the company’s Internet heritage.

“…MCI is now focused on our future on serving our customers and leading the industry to the next generation of integrated communications MCI President and CEO Michael Capellas said in a printed statement. 

MCI called this a “milestone of one of the largest corporate turnarounds in history.”

MCI, then known as WorldCom, filed for Chapter 11 bankruptcy protection in 2002 after a multibillion-dollar accounting scandal came to light. It also is still the largest bankruptcies in history.

Earlier this year the carrier emerged from bankruptcy after weathering storm after storm.

The carrier’s troubles ranged from its arch rival AT&T accusing MCI of illegally routing calls through Canada to avoid access charges. AT&T filed a suit against MCI, but later dropped it. The Federal Government’s General Services Administration (GSA) also questioned the company’s ethics and prevented all government agencies from signing new contracts with the carrier until it addressed this issue.

After several months of review and MCI establishing business ethics training for all employees, the GSA lifted the ban.

But dark clouds still hover over the company. Last week MCI announced that it is suing its former CEO Bernard Ebbers in an effort to recover more than $300 million he still owes the company. While CEO Ebbers borrowed $408 million from the carrier to cover his personal debts.

At the end of June MCI announced it was cutting another 2,000 jobs as it closes two more call centers. That brings the total number of jobs cut in two years to 36,500. It’s a startling number when you consider the company has about 40,000 employees today.

And MCI, like its competitors AT&T and Sprint, just can’t seem to stem its revenue nosedive. The carrier is expected to bring in about $20 billion in revenue this year. That’s down from last year when the carrier reported revenue of $24.4 billion and significantly down from its year-end revenue in 2002 of $32.7 billion.

And although the company may not be actively looking for a buyer, Leucadia National’s move earlier this week may have opened the flood gates. MCI announced on Monday that Leucadia, a conglomerate with interests in a variety of business sectors, is filing for approval to purchase “at least” 50% of MCI’s stock with the appropriate federal agencies.

Published reports state that former Qwest CEO Joseph Nacchio, himself a target of SEC scrutiny, is advising Leucadia in its effort. Nacchio was drummed out of Qwest two years ago during an inquiry into the carrier’s accounting practices and financial health.

MCI’s Capellas has stated on a national broadcast financial TV program that Leucadia has not made a bid to buy MCI. But financial analysts have pointed out that if another company was keeping an eye on MCI as a potential acquisition target, Leucadia’s move just motivates them to act sooner rather than later.