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American Morning
Minding Your Business
Aired January 23, 2004 - 08:50 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.
JACK CAFFERTY, CNN ANCHOR: Telecom giant MCI got some bad advice from a very prominent firm and now they are getting a lot of their money back.
Andy Serwer has the story, 'Minding Your Business.'
ANDY SERWER, "FORTUNE" MAGAZINE: Yes, a lot of money floating around with MCI, WorldCom, whatever they are calling themselves these days. They are actually using both names.
Let's check with the markets, though, first. Yesterday, a little bit of a setback, particularly for the techs. You'll see here the Nasdaq giving back some ground, 23 points.
And one thing that's going to be very interesting this morning, Jack, in the market, is Microsoft last night announcing profits down 17 percent. But that's really just because they are accounting for stock options as a cost. That was a huge issue. More significantly, I think, is they said revenues are going to be up. They have upped their forecast, which is very unusual for them. They are conservative. But they say PC demand is picking up.
CAFFERTY: Wow!
SERWER: To me I think that's kind of a big deal.
CAFFERTY: That might be an indication of that long awaited IT capital spending that we have been looking for.
SERWER: Yes. The tech slump could be over.
CAFFERTY: Yes.
SERWER: Let's talk a little bit about MCI WorldCom. There's a couple of interesting stories. Now they are bankrupt. They went bankrupt in July of 2002. Of course everybody knows that. And it looks like they are going to be coming out of bankruptcy next month, a lot of machinations going on right now.
First of all that rebate, refund you are talking about, having to do with the Wall Street firm Goldman Sachs, they are getting $9.5 million back from Goldman Sachs because of what they are saying was bad advice, bad investment banking advice from Goldman around the time of its bankruptcy. Interesting story there.
Now another interesting piece, I mean it's pretty amazing giving it back. CAFFERTY: This is amazing.
SERWER: And this is interesting, too, WorldCom is looking to pay Bernie Ebbers, former chairman, and Scott Sullivan, the CFO, who is actually going to go on trial also in February, some of the money it received from its insurance companies for their legal bills.
CAFFERTY: Why?
SERWER: Now it's -- they are asking a bankruptcy judge to do this. I'm not sure why they had the leverage to do this, these two individuals. But it seems to me this company is trying to get a clean slate and fresh start, why would they be using money from an insurance settlement to cover the legal costs of these two individuals?
CAFFERTY: Of the guys who allegedly took the company down the container.
SERWER: Right, and they are trying to -- container. They are trying to distance themselves from that container.
CAFFERTY: (UNINTELLIGIBLE), too.
SERWER: Yes. Interesting. And it's sort of interesting stuff that is happening with this company, I think. That's one way to put it.
CAFFERTY: Gets curiouser and curiouser.
SERWER: Yes -- sir.
CAFFERTY: Thanks -- Andy.
SERWER: All right.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
Aired January 23, 2004 - 08:50 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, CNN ANCHOR: Telecom giant MCI got some bad advice from a very prominent firm and now they are getting a lot of their money back.
Andy Serwer has the story, 'Minding Your Business.'
ANDY SERWER, "FORTUNE" MAGAZINE: Yes, a lot of money floating around with MCI, WorldCom, whatever they are calling themselves these days. They are actually using both names.
Let's check with the markets, though, first. Yesterday, a little bit of a setback, particularly for the techs. You'll see here the Nasdaq giving back some ground, 23 points.
And one thing that's going to be very interesting this morning, Jack, in the market, is Microsoft last night announcing profits down 17 percent. But that's really just because they are accounting for stock options as a cost. That was a huge issue. More significantly, I think, is they said revenues are going to be up. They have upped their forecast, which is very unusual for them. They are conservative. But they say PC demand is picking up.
CAFFERTY: Wow!
SERWER: To me I think that's kind of a big deal.
CAFFERTY: That might be an indication of that long awaited IT capital spending that we have been looking for.
SERWER: Yes. The tech slump could be over.
CAFFERTY: Yes.
SERWER: Let's talk a little bit about MCI WorldCom. There's a couple of interesting stories. Now they are bankrupt. They went bankrupt in July of 2002. Of course everybody knows that. And it looks like they are going to be coming out of bankruptcy next month, a lot of machinations going on right now.
First of all that rebate, refund you are talking about, having to do with the Wall Street firm Goldman Sachs, they are getting $9.5 million back from Goldman Sachs because of what they are saying was bad advice, bad investment banking advice from Goldman around the time of its bankruptcy. Interesting story there.
Now another interesting piece, I mean it's pretty amazing giving it back. CAFFERTY: This is amazing.
SERWER: And this is interesting, too, WorldCom is looking to pay Bernie Ebbers, former chairman, and Scott Sullivan, the CFO, who is actually going to go on trial also in February, some of the money it received from its insurance companies for their legal bills.
CAFFERTY: Why?
SERWER: Now it's -- they are asking a bankruptcy judge to do this. I'm not sure why they had the leverage to do this, these two individuals. But it seems to me this company is trying to get a clean slate and fresh start, why would they be using money from an insurance settlement to cover the legal costs of these two individuals?
CAFFERTY: Of the guys who allegedly took the company down the container.
SERWER: Right, and they are trying to -- container. They are trying to distance themselves from that container.
CAFFERTY: (UNINTELLIGIBLE), too.
SERWER: Yes. Interesting. And it's sort of interesting stuff that is happening with this company, I think. That's one way to put it.
CAFFERTY: Gets curiouser and curiouser.
SERWER: Yes -- sir.
CAFFERTY: Thanks -- Andy.
SERWER: All right.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com
