The great majority of the flood of reader-mail that poured in late Tuesday was, unsurprisingly, about the

WorldCom

(WCOM)

debacle. Readers asked for tips on opportunities this may create, on speculative possibilities now in WorldCom, on dozens of topics. Like many of my colleagues, I've been up all night, working the phones, tapping the experience and advice of many of my contacts.

Some early answers:

Is there a speculative play in WorldCom now?

I don't see how. What, exactly, would you be betting on? We still don't know -- and probably won't for some time to come -- the full extent of the fraud at WorldCom. Without getting a handle on how deep this goes, I wouldn't put a dime into a company I'm convinced is headed for the auction block.

Wherever WorldCom opens in the tornado Wednesday morning -- it closed Tuesday at 83 cents, down about 9% from Monday, and in aftermarket trading Tuesday night it slid down much further to around 20 cents -- I strongly advise staying away. If you hold WorldCom, don't act in haste -- after all, the remaining downside is limited -- and unless you have a cast-iron stomach, don't put out buy orders.

Beyond WorldCom itself, who else gets hurt, near term?

The whole telecom industry and the markets themselves. While I expect to see the market trade off broadly Wednesday, the worst damage will come in some other big telcos, especially in telco suppliers that will now have even fewer sales opportunities. The

Tellabs

(TLAB)

,

Cienas

(CIEN) - Get Report

,

Sycamores

(SCMR)

,

Junipers

(JNPR) - Get Report

and so on will wake up to find their markets even smaller, their remaining telco customers even more reluctant to spend.

WorldCom itself announced Tuesday night that it will cut fiscal year 2002 capital expenditure by more than half, from a planned $4.9 billion to $2.1 billion. That's just about enough to keep the network up and running; it includes essentially no increase in capacity or new-technology investments. (And don't be surprised to see WorldCom capex cut even further as the banks and bondholders crack down.)

Longer term?

Despite some early cheerleading for how this disaster could help WorldCom's biggest competitors, it will take a while to see who's really in a position to capitalize on this collapse. Certainly big carriers such as

AT&T

(T) - Get Report

and

Sprint

(FON)

had strategic teams working all night Tuesday, drawing up lists of big WorldCom customers they want to go after.

But WorldCom is going to work hard to hold onto those customers now; it needs the revenue if it has any hope of surviving. So we'll see all sorts of price-cutting and guarantees from WorldCom to keep customers onboard. Yes, its competitors are lusting after its biggest accounts, but will probably snag few in the short term. Longer term, AT&T is probably the likely winner.

Related Stories

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Seymour: Where Will the WorldCom Damage End?

Cramer: WorldCom Bondholders Are Sunk Too

Greenberg: WorldCom Won't Be the Final Scandal

Task: For Markets, Bad News Getting Worse

Willard: WorldCom: Don't Call It a Crisis, Just a Collapse

Is there an opportunity here for smaller carriers?

Probably not much: Very few other companies have the international expertise and contacts in place to replace WorldCom. Because every large customer already had backup and secondary telco-service contracts in place, WorldCom's customers don't need to jump into the arms of trouble by gambling on smaller players right now. They want to see how this plays out at least as much as you and I do.

Will this help with the excess-fibre-capacity problem?

Probably not. All that fibre is still in place, and whether it continues to be operated by WorldCom or is dealt off to other carriers in fire sales or bankruptcy-court proceedings, it's not suddenly going dark. Capacity in place is just that: capacity

in place

. We can't ignore it. But we can fear even nastier price wars over using it.

How deep does the corruption go?

I have no way of knowing. Surely it would have taken more than just-fired CFO Scott Sullivan and possibly abruptly departed Senior Vice President and Controller Dave Myers to pull this off -- if, in fact, either played a role at all. Remember: innocent until proven guilty. In the wake of the Enron debacle, WorldCom had replaced

Andersen

with

KPMG

as its auditors; perhaps some hint of Andersen complicity will emerge. But I have enormous respect for John Sidgmore, the new WorldCom CEO, who arrived with the 1996 acquisition of

UUNet

. (What about Bernie Ebbers' role, many emails asked? I don't know, and no one else does right now, either. Let's hold off on the charges until we and the

Securities and Exchange Commission

know more.)

What should I watch for?

Quick, revealing action by WorldCom's bankers. With $30 billion in WorldCom debt, they stand to lose a bundle if WorldCom goes down. If they still come through, and fast, on the $5 billion or so in new credit they've been talking about with WorldCom management, that's a good sign for the markets. It will mean the bankers have calculated that they'll lose even more if WorldCom goes into bankruptcy than if it tries to struggle back. Right now I'd say everything depends on that new line of credit and a decisive response from WorldCom's debtholders.

One more: Did I know?

A number of

RealMoney

readers wondered if

my column on tech giants that aren't going to "come back," posted here at 2 p.m. Tuesday and featuring WorldCom as my prime example, was based on insider knowledge of a pending collapse at WorldCom. No way. If had an early tip on this one, you'd have read it. Right here.

Jim Seymour is president of Seymour Group, an information-strategies consulting firm working with corporate clients in the U.S., Europe and Asia, and a longtime columnist for PC Magazine. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. At time of publication, neither Seymour nor Seymour Group held positions in any securities mentioned in this column, although holdings can change at any time. Seymour does not write about companies that are, or have been recently, consulting clients of Seymour Group. While Seymour cannot provide investment advice or recommendations, he invites you to send your feedback to

Jim Seymour.