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CNN Live Today
Nasdaq's Plans to De-List WorldCom Stock on Hold
Aired July 05, 2002 - 12:22 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.
FREDRICKA WHITFIELD, CNN ANCHOR: A temporary reprieve for WorldCom, Nasdaq's plan to de-list WorldCom stock is on hold, at least for now. IDT Corporation wants to buy the troubled telecom, but it does signal a stabilization plan for the company. CNN Financial News Reporter Allan Chernoff has more. Hi there, Allan.
ALLAN CHERNOFF, CNN FINANCIAL NEWS CORRESPONDENT: Hi, Fredricka. Well, yes, WorldCom is continuing to trade today, even though the Nasdaq had threatened to de-list the company as of this morning. What's happened is that WorldCom did request an appeal. The Nasdaq is granting that request. It has 45 days to schedule a hearing, and at that hearing, WorldCom will present its case why it should remain listed, and until the hearing, WorldCom will keep on trading.
By the way, it's up two cents today to 24 cents a share, more than 300 million shares traded thus far.
In terms of IDT, that is a competing telecom company. They're announcing today a stabilization plan to protect WorldCom customers just so they have a backup telecommunications plan. IDT is claiming that WorldCom customers are flocking to it. WorldCom is saying that is not the case. As we reported last week, IDT is offering $5 billion in cash and stock for MCI as well as WorldCom's local businesses.
Now, let's briefly update you on the investigations. The "Wall Street Journal" is reporting today that the Department of Justice has asked WorldCom to halt its internal investigation. We've spoken to William McLucas who's heading that investigation. He says the report is absolutely false. He's the former head of enforcement for the Securities and Exchange Commission, now a private attorney hired by WorldCom to conduct this investigation and he says he's been in touch with the Department of Justice since day one, and his investigation is continuing.
Lastly, Fredricka, the bankers are still talking. They are expected soon to present an offer to WorldCom to offer additional financing to keep the company going. Fredricka, back to you.
WHITFIELD: Well, Allan, a potential de-listing, does this mean that even MCI customers need to start shopping around? More talk of WorldCom only makes more MCI customers nervous.
CHERNOFF: It doesn't mean that MCI customers need to be shopping around. There has not been any interruption in service. Even if WorldCom were to go into bankruptcy, that does not mean that the customers would see their service stopped, so that absolutely is not the case.
By the way, as our full screen is indicating there, the bond holders themselves, they are planning for bankruptcy, but that's merely to protect themselves and they have been talking, conference calls being held, the bond holders certainly hoping that they will be able to regain more value. Right now, their bonds are trading at only pennies on the dollar because of this accounting scandal at WorldCom -- Fredricka.
WHITFIELD: All right, thank you very much, Allan Chernoff. Appreciate it.
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