Business & Finance
Media giant Vivendi Universal was reeling from two of the most tumultuous days in its history. With chairman Jean-Marie Messier confirming that he'd agreed to resign under pressure, a report in the Paris newspaper Le Monde alleged that the company and its auditors attempted to alter its books for 2001 by almost $1.5 billion only to be caught and stopped by French regulators. Meanwhile, Moody's Investor Service cut Vivendi's credit rating to "junk" status, triggering a sell-off of stock that plunged the share price 39.4 percent in value. Trading was suspended until further notice, analysts sounded concerns that Vivendi might have to declare bankruptcy, and Messier told interviewers, "I hear, I see ... the advisers putting together plans" to break up the company.
Embattled WorldCom said its profit exaggerations may be bigger and date back further than the $3.8 billion already disclosed for the past five quarters. The latest revelation came in a report Monday to the Securities and Exchange Commission, which has charged the tele- communications giant with fraud. SEC chairman Harvey Pitt dismissed the report as "wholly inadequate and incomplete." Meanwhile, WorldCom shares fell in value to 6 cents Monday and will be delisted Friday on the Nasdaq stock exchange. The Bush administration said it may suspend WorldCom's federal contracts, which are worth hundreds of millions and cover 60 agencies, among them the Defense and Transportation departments.
Troubled Tyco International raised less money than it had hoped on the initial public offering Monday for CIT, the lending division it chose to spin off rather than sell. Investors bought 200 million CIT shares at $23 apiece, bringing Tyco $4.6 billion that can be used to help pay down debt. The Bermuda-based conglomerate acquired CIT early last year for $9.2 billion. Tyco, which owes creditors $27 billion, decided on an IPO as a faster way of obtaining cash instead of selling the subsidiary. CIT shares now will be traded on the New York Stock Exchange.
Online retailer Amazon.com plans to begin selling apparel in time for the year-end holiday shopping season, The New York Times reported, citing retail industry executives. Details are still incomplete, the Times said, but the initial launch is likely to involve the labels of Gap Inc. and two subsidiaries, Banana Republic and Old Navy, and of the upscale department store chain Nordstrom.