WorldCom Shares Drop Over 28 Pct.
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CLINTON, Miss. (AP) _ Lingering concerns about WorldCom Inc.’s ability to meet its debt load dragged the company stock down Monday.
Shares of WorldCom hit a low of $2.20 Monday afternoon on the Nasdaq stock exchange, off $1.07 from Friday’s close, before closing at $2.35, down 92 cents, or more than 28 percent. In extended trading, shares gained a penny.
Analysts said investors are worried the company won’t be able to meet its debt payment of $1.7 billion in 2003 and $2.5 billion in 2004.
``WorldCom management needs to take further steps to shore up its cash flow,″ said Drake Johnstone, of Davenport & Co. in Richmond, Va. ``The amount of debt they owe in the coming years is increasingly burdensome″
Officials with the Clinton-based company had no comment on Monday’s decline.
Last Thursday, WorldCom’s first-quarter earnings report showed profits for the company’s core businesses plunged 66 percent as corporate clients reduced spending.
Three years ago, WorldCom’s stock was trading in the $60 range. Faced with declining sales, an ongoing Securities and Exchange Commission investigation and shares trading at 10-year lows, WorldCom has seen the investment community turn against it.
Last week, eight equity analysts downgraded WorldCom shares and bond ratings agencies Moody’s Investors Service, Standard & Poor’s and Fitch all cut their long-term credit ratings on WorldCom’s $30 billion in debt.
Shares of MCI Group, which tracks long distance and other consumer services, was down 81 cents, or 19 percent, to close at $3.44 on the Nasdaq, and fell another 4 cents in extended trading.
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