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CNN Live Today

WorldCom Stock Plummets

Aired July 01, 2002 - 12:31   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: More fallout today for embattled telecom giant WorldCom. The company tells the SEC it is reviewing its books dating back to 1999, looking for more possible irregularities. Meantime, the Nasdaq stock market has warned of its plans to delist that company.

CNN financial correspondent Allan Chernoff joins us from New York with more -- Allan.

ALLAN CHERNOFF, CNN CORRESPONDENT: Hi, Kyra.

Well, talk about pent-up energy. WorldCom stock had been halted for three days. This morning, they let it loose. And there a torrent of trading already: more than 840 million shares traded thus far in WorldCom. That's about five million shares a minute. The stock down has plummeted, down to about 6 cents a share, off 77 cents. And, of course, investors probably won't have much more time to trade this stock, because the Nasdaq is planning to delist the stock on Friday.

There you see a chart going all the way back to 1999, when the stock was trading at $61 a share, so a huge tumble for WorldCom, of course, all of this coming after WorldCom last week revealed that it had misstated operating earnings by more than $3.8 million dollars over the past year, and now the revelation that WorldCom is looking back to 1999 and the years 2000 to see if there had been any misstatements over there.

The company also has William McLucas, the former chief of enforcement at SEC, investigating. And the company says it will take him about two to three months to come up with his answers as to exactly what happened at WorldCom -- Kyra.

PHILLIPS: Allan, New York City state Attorney General Eliot Spitzer, did he hold his news conference and talk about these new rules with regard to governing analysts?

CHERNOFF: That right. He did earlier this morning.

As you recall, he was the fellow who forced Merrill Lynch to adopt new regulations for its analyst. And now he is saying he wants a boycott of all brokerage firms that don't follow those rules, essentially disclosing any ties in terms of investment banking to corporate customers. And, also, he wants tough disclosure from money managers and everybody on Wall Street whom investors may be buying stocks from -- so very tough words from the attorney general here in New York state, Eliot Spitzer.

A lot of people say he has been prodding the Securities and Exchange Commission to toughen up its regulation -- Kyra.

PHILLIPS: All right, Allan Chernoff -- thanks, Allan.

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