This was probably the largest scam ever in the US corporate history that resulted into 29,000 people loosing their jobs and medical insurance. Average severance pay was measly $4500 while total of $55 million in bonuses was paid to its the top executives! Its employees lost $1.2 billion in retirement funds, the retirees lost $2 billion in pension funds while its top executives cashed in $116 million in stocks! The founders started the company with a goal to change the world but over the period greed took over. And they simply became the pawns in the hands of their own hauteur, their greed that catapulted the company into a deep dark abyss.
It all started with their Mark-to-Market strategy that used hypothetical future value (HPV) that allowed company to book profits no matter how little cash actually was in the pipeline. Its policy called PRCR which was actually rank and yank that almost mandated its managers to fire 10% of the employees every year! Its practice of using its core business energy as a financial instrument and its executives' pump and dump philosophy took the company further deep into the trench. And few miscalculated moves as India Dabhol project, CA power scam, Bandwidth initiative hurt the company even further. The company was a sheer smoke and mirrors. So were they the smartest guys in the room? Well! Probably yes but we're blinded by their own demons!! How many such smart guys are out there? Once again quoting Mark Twain " History never repeats itself but it often rhymes." Well structured. It unfolds the ugly side of greed and ambition that prevailed in one of the greatest companies of its time. A great watch even though it is now a bygone.
It all started with their Mark-to-Market strategy that used hypothetical future value (HPV) that allowed company to book profits no matter how little cash actually was in the pipeline. Its policy called PRCR which was actually rank and yank that almost mandated its managers to fire 10% of the employees every year! Its practice of using its core business energy as a financial instrument and its executives' pump and dump philosophy took the company further deep into the trench. And few miscalculated moves as India Dabhol project, CA power scam, Bandwidth initiative hurt the company even further. The company was a sheer smoke and mirrors. So were they the smartest guys in the room? Well! Probably yes but we're blinded by their own demons!! How many such smart guys are out there? Once again quoting Mark Twain " History never repeats itself but it often rhymes." Well structured. It unfolds the ugly side of greed and ambition that prevailed in one of the greatest companies of its time. A great watch even though it is now a bygone.