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Message: <blockquote data-quote="Kid Charlemagne" data-source="post: 243713" data-attributes="member: 93">The situation with Enron and Worldcom was not about breaking up companies and making profits from them.  I don't know where that comes from.  I don't think Worldcom could get near what they paid for their assets in todays market.  Selling piecemeal would be a last resort for them.The problem with Worldcom (and to a lesser extent Enron - I'm not as sure of their business model) is this:  Worldcom's growth was almost entirely dependent on massive growth.  This massive growth was entirely dependent on buying other companies and adding their numbers to Worldcom's numbers.  This made Worldcom look like it was growing 30% a year, when actually they were just buying 30% more companies every year.A couple of years ago, Worldcom ran out of companies to buy.  They tried to buy Sprint, but that would have made a monopoly bigger than the old Ma Bell, so it got shot down in Europe and even in the the merger-happy USA.Worldcom had never learned how to actually RUN a company.  They knew how to build through acquisitions, but not through actually maximizing what they already had.  The growth numbers plateaued, because there was nowhere left to go by buying things, and they didn't know how to actually run a business effectively under those conditions.The CFO devised a scheme to fake the look of growth, and when that got found out, this is where we find ourselves.The same thing happened to McDonalds, except for the faking part.  With a McDonald's on every corner and in every town, it just isn't possible anymore for McDonald's to grow in the USA.  That's why a huge portion of their profit for the past decade or more has come from overseas growth.The same thing happened with Waste Management, the trash hauler.  They bought up every US trash hauling firm they could, and when they ran out, their stock plummetted and they were bought out.  They did try the faking route, BTW.</blockquote>

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