The Regents - University of California | Office of The President
The Regents - University of California | Office of The President
The Regents - University of California | Office of The President
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combined $39 billion in annual revenue at a faster clip than MCI alone.<br />
WorldCom’s shares increased 6.5% as a result <strong>of</strong> Grubman’s representations.<br />
211. On April 9, 1998, Grubman said that WorldCom was the “telecom<br />
industry’s own legitimate mega-cap growth company that deserves to be<br />
mentioned in the same breath as the Coca Colas, Mercks, GEs and Micros<strong>of</strong>ts <strong>of</strong><br />
the world.”<br />
212. On October 9, 1998, Grubman said that WorldCom was a stock that<br />
every portfolio manager must own. Grubman represented that the stock was likely<br />
to sustain a multi-year run and that he viewed the stock as “hands down, the mustown<br />
stock in this industry, since no company has its breadth <strong>of</strong> assets, internal<br />
growth rate, and ability to become the world leader in the changing telecom and<br />
datacom landscape. We have been very loud and clear that WorldCom is our<br />
favorite stock in the world <strong>of</strong> telecom notwithstanding our attention to several<br />
other names in the group.”<br />
213. On November 16, 1998, Grubman represented: “In our view, there is<br />
no single enterprise on the planet that is better-positioned than WCOM to capture<br />
growth in that space. <strong>The</strong>refore, we strongly reiterate our Buy rate on WCOM.<br />
We believe that the third quarter performance, despite all the distractions, prove<br />
that this company is already well ahead <strong>of</strong> the curve in the marketplace, <strong>of</strong>fering<br />
fully integrated, on-net services. In addition, the integration <strong>of</strong> this company from<br />
the back-<strong>of</strong>fice to the salesforce is already ahead <strong>of</strong> where anybody expects it to<br />
be.” He further represented: “Unquestionably, WCOM would be our largest<br />
holding, if we ran a large-cap growth fund and for the managers <strong>of</strong> growth funds<br />
and capital appreciation funds who do not have WCOM as part <strong>of</strong> their Top Ten<br />
holdings, we can only say that if that is true a year from now, we would find it<br />
very difficult to believe that those managers could outperform their benchmarks.”<br />
He believed that the stock would be at $80-$90 within a year and at $100 by the<br />
end <strong>of</strong> 1999.<br />
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COMPLAINT
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