More woe for WorldCom

News

The resignation of Bernie Ebbers as chief executive of the embattled telco WorldCom caused a rally in the company’s $29 billion worth of bonds, but the price move was less than convincing.

On the morning of the resignation, April 30, WorldCom’s bonds were trading at 41 cents on the dollar. After it was announced that Ebbers was stepping down the bonds rallied to 50, but ended the day down again at 47.

“A change was needed because sentiment was bad,” say Chris Higham, a credit analyst at Morley

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