WorldCom: The downfall of a giant
WorldCom was a product of deregulation of the telecoms industry; in less than 20 years it had become America’s 2nd largest long-distance carrier and the world’s largest Internet carrier. Driven by Ebbers and Sullivan (WorldComs’s CEO and CFO), its acquisition fuelled growth was financed by an ever rising share price. A complacent Board rubber stamped Ebbers’ decisions and even allowed him to borrow more than $400 million of company funds with very limited security. Finding it difficult, especially after the collapse of the Internet boom, to sustain the market’s expectations of growth, WorldCom started to manipulate its figures. Internal auditors eventually uncovered the $11 billion fraud triggering America’s biggest bankruptcy.
IMD retains all proprietary interests in its case studies and notes. Without prior written permission, IMD cases and notes may not be reproduced, used, translated, included in books or other publications, distributed in any form or by any means, stored in a database or in other retrieval systems. For additional copyright information related to case studies, please contact Case Services.
Research Information & Knowledge Hub for additional information on IMD publications