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May 22 — PHILADELPHIA (Reuters) - The tracking stocks of WorldCom Inc. surged on Wednesday after the telecommunications company said it would eliminate the two stocks and end dividend payments after a last windfall for MCI Group shareholders. Shares of MCI Group <MCIT.O>, which reflect its residential long-distance telephone operations, jumped 60 cents, or 29 percent, to $2.65, in heavy trading on Nasdaq. Shares of WorldCom Group <WCOM.O>, which track the company`s main data and Internet business, rose 11 cents, or 8 percent, to $1.53. The Clinton, Mississippi company said on Tuesday it would scrap its two tracking stocks just a year after creating them, saving itself about $284 million a year in dividend payments. Tracking stocks reflect just a portion of a company`s business. "Doing it now conserves on cash balances. It`s the right thing to do," WorldCom Chief Financial Officer Scott Sullivan said in a conference call with analysts and reporters. WorldCom also continues talks on $5 billion in new financing, and it expects to have in place by Thursday a $1.5 billion accounts receivable pact, Sullivan said. Effective July 12, each share of MCI Group will be converted into 1.3594 shares of WorldCom common stock. MCI Group shareholders also will receive a final dividend payment of 60 cents a share. The conversion ratio and dividend payment equaled a 23 percent premium over MCI Group`s closing stock price on Tuesday, analysts said. "While not surprising, we are encouraged by this step," said Morgan Stanley analyst Simon Flannery. The move will save money and improve earnings visibility and "shows decisive action by the new CEO," he said. John Sidgmore, who last month replaced Bernie Ebbers as WorldCom`s chief executive officer, said ending the tracking stocks also gives the company more flexibility to shuffle its sales staffs and marketing resources rather than keeping the different businesses separate. "It does give us additional operational flexibility. Recombining the two groups gives us more flexibility to move organizations around, move sales forces around, the marketing operation, etc. We feel like it`s a much better structural fit for the company," Sidgmore said in the conference call. WorldCom faces a regulatory inquiry into its accounting practices and personal loans it made to Ebbers. WorldCom Group`s stock was removed from the Standard & Poor`s 500 Index, and credit ratings on its $30 billion in debt were slashed to "junk" status. The company has said it may cut its capital spending budget and shed up to $2 billion in assets, such as its stakes in Latin American telecom companies Avantel of Mexico, and Embratel <EMT.N> of Brazil, and sell its wireless resale business. |
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| aus der Diskussion: | WORLDCOM-Beginnt ab heut der grösste Rebound der letzten Zeit ? |
| Autor (Datum des Eintrages): | donnerpower (22.05.02 22:05:18) |
| Beitrag: | 98 von 232 (ID:6464785) |
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