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The long, storied Ebbers era at

WorldCom

(WCOM)

ended Tuesday as the debt-saddled telco sought to regain credibility with investors after a bruising 2002 selloff.

Investors said there were plenty of areas in which successor John Sidgmore could improve the Clinton, Miss., long distance and data services provider. But it was apparent that Wall Street didn't expect any management shuffle -- even this high-profile shocker -- to create a sea change in an increasingly troubled telecom business.

Indeed, some analysts point out that regardless of who is at the helm, WorldCom and its beleaguered rivals continue to shoulder crushing debt loads as cash flows weaken in a depressed market for telecom services. In light of the rapidly deteriorating performance at companies like WorldCom and long-distance giant

Qwest

(Q)

, which reported

softer-than-expected first-quarter earnings Tuesday, talk turns to just what these companies can do to reverse their flagging fortunes short of selling themselves at fire-sale prices or reorganizing.

WorldCom shares, which have lost more than 80% of their value this year, fell 9 cents early Tuesday to $2.26. Qwest lost a nickel to $4.91.

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Squinting

WorldCom's move struck some observers as little more than window dressing, considering how badly business is going. The company's stock has dropped precipitiously in recent weeks, dragging its bonds down to 50 cents on the dollar at one point Monday -- a level implying many bond investors expect the cash-strapped company to default on its debt. WorldCom has said its finances are adequate.

"Ebbers leaving is a nonevent," said New Jersey state pension fund manager Bill Trent, who owns Qwest but not WorldCom. "It doesn't increase the company's revenues or cash flow other than to reduce executive salary by a couple million."

That's "not much good when you need to pay off $30 billion," Trent added, noting WorldCom's massive debt burden.

"Despite the management change, we think the stock will remain pressured," wrote Merrill Lynch analyst Adam Quinton, who cut his WorldCom rating to sell from buy last week after the company slashed its 2002 cash flow estimate by a staggering $1 billion. "A change of CEO does not change the debt load or the challenging operating environment -- further evidenced by disappointing results from Qwest today." Merrill has done WorldCom underwriting recently.

Coffee in Bed

Indeed, the cash squeeze at companies like Qwest and WorldCom has become so tight that many investors were ignoring the leadership implications of Ebbers' departure and looking at the cash flow ramifications, with perhaps a raised eyebrow.

"We assume that the $384 million of loans outstanding to Mr. Ebbers will now become 'regular' debt in the sense that as an arms-length creditor the company will now press for more prompt repayment," Quinton wrote. "The real question is, will he be forced to repay the margin loan?" added Trent. The

Securities and Exchange Commission

is investigating accounting and business practices at WorldCom, including the CEO loans.

Qwest, another debt-heavy telco whose shares have also been crushed during 2002's telecom meltdown, has been the subject of its share of CEO rumors in recent months. Some analysts and investors have said they believe Qwest's biggest problem is

a lack of credibility stemming from CEO Joe Nacchio's aggressive leadership of the onetime highflier. But in the wake of Ebbers' departure, investors were saying they doubted Qwest could benefit from a change atop the management ranks any more than WorldCom would.

"The only other likely departure is Nacchio, but again I consider it a nonevent," pension fund manager Trent said. "May make people feel better if there are heads chopped off, but it doesn't do much for the cash flows."