WorldCom History

WorldCom appeared to be a great success story. In 1983 partners led by former basketball coach Bernard Ebbers, sketched out their idea for a long distance company on a napkin in a coffee shop in Hattiesburg, MS. Their company LDDS (Long Distance Discount Service) began providing service as a long distance reseller in 1984. For 15 years it grew quickly through acquisitions and mergers. Bernard Ebbers was named CEO in 1985 and the company went public in Aug. 1989. Its $40 billion merger with MCI in 1998 was the largest in history at the time. The company was a favorite with investors and Wall Street analysts. The stock ran up to a peak of $64.51 in June 1999. At that time CEO Bernard Ebbers was listed by Forbes as one of the richest men in the US. Michael Jordan, the most popular athlete in the world, provided commercial endorsements. In October 1999, WorldCom attempted to purchase Sprint in a stock buyout for $129 billion in stock and debt. The deal was vetoed by the Department of Justice. At the same time, the success began to unravel with the accumulation of debt and expenses, the fall of the stock market, long distance rates and revenue. It would tale 2 years for extent of these problems to become public. WorldCom's 2002 has been a horror story with accounting scandals, SEC investigations, the resignation of CEO Bernard Ebbers, possible bankruptcy and a stock that is worth less than a payphone call.