Ebbers Is Out at WorldCom

The center has failed to hold at WorldCom(WCOM Quote).

Bernard Ebbers, the 60-year-old chief executive who cobbled together the fallen telecommunications giant via some five dozen acquisitions over two decades, turned in his resignation to the board amid a faltering stock price, a federal investigation, and controversy about a huge personal loan he received from the company.

Under pressure from the board, Ebbers offered to step down at a directors' meeting Friday and made a formal resignation Monday, a report said. The company confirmed the resignation Tuesday morning.

Friday capped a week in which the Clinton, Miss., voice and data carrier shed more than 40% of its value after the company lowered its revenue and cash flow targets early in the week and then missed first-quarter estimates. Several analysts downgraded the stock, even as Ebbers tried in vain to convince skeptical investors that the company could generate $1 billion in free cash flow by year's end. The shares tumbled another 30% to $2.35 apiece Monday amid questions about the company's $28 billion debt load. The shares are off more than 80% from January; they peaked in June 1999 at $64.50.

Ebbers has increasingly been a lightning rod for investor criticism, particularly in light of a $366 million loan he received from the company to cover margin loans and a Securities and Exchange Commission probe of the company's acquisition strategy. Ebbers intends to repay the loan, according to a report.

John Sidgmore, the 51-year-old vice chairman, will succeed Ebbers, the Journal reported. Ebbers resigned as CEO and president and won't remain on the board. Bert Roberts, chairman of WorldCom and the former CEO of MCI, will remain in his role at the company. Scott Sullivan, the company's chief financial officer, will add the title of executive vice to his current brief.