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A 'Buy' or a 'Sell'? WorldCom Perplexes

A year ago you might have said, "World Who?" Not any more: Now, the high fliers of Wall Street are asking: "What will WorldCom do next?"

From humble roots, the Jackson, Miss., company has wheeled and dealed its way to being the nation's No. 4 long-distance phone carrier. Recent acquisitions make it the largest operator of the data networks that make up the Internet. And if last week's $30 billion bid for MCI Communications, WorldCom will trail only AT&T in the long-distance business.

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The man behind all this action is Bernard Ebbers, a folksy entrepreneur who grew up in Edmonton, Alberta, and moved to Mississippi after winning a basketball scholarship. He acquired Best Western hotels and a car dealership before moving into the phone business in the early 1980s.

Today, some analysts see him as the Bill Gates of telecommunications. Indeed, had you put $100 in WorldCom in 1989, you'd have almost $24,000 today - better than if you had invested it in Microsoft.

So, should investors rush out and buy WorldCom stock? Some brokerage houses, including Merrill Lynch and Montgomery Securities, rate it a "buy."

"I've always been very positive about WorldCom," says Keith Ferguson, an analyst at Value Line, a publisher of stock market research in New York.

But not all analysts are sanguine. "No, no, no," says Michael Murphy, editor of the California Technology Stock Newsletter, Half Moon Bay, Calif.

"This is the strategy of running as hard as you can and hoping not to hit the wall," Mr. Murphy says. "WorldCom has acquired at least one company a year," and now it's doing three acquisitions at once.

"It's not enough to acquire companies; now they have to integrate the companies, and I'm not sure they can do that," Murphy adds. With shares priced at 100 times earnings (assuming December profits of about 37 cents per share.), "This is not a cheap stock.... I'd like to be the investor cashing out" [on the MCI offer], "not an investor buying in."

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