WorldCom listed on the NASDAQ in 1989. Over the next decade, the company grew via more than thirty acquisitions and mergers, including a US$37bn merger with MCI Communications, which was the largest merger in US corporate history. WorldCom's market capitalisation peaked at US$175bn in June 1999 but had lost over 80% of its value by March 2002 as the dotcom bubble deflated. However, when it was disclosed that same month that the SEC had opened an investigation into WorldCom over alleged accounting discrepancies, its share price continued to fall. It transpires that an internal investigation had uncovered that the company was capitalising expenses to boost reported profitability. The internal investigation revealed that reported profit of US$7.6bn for 2000 and 2001 was really a loss of US$73.7bn. In the end, the fraud was estimated at US$11bn, with the remainder in aggressive accounting assumptions.

Last updated May 2023

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