Despite reasonably good figures from the company – see page five – IBM Corp inadvertantly sent MCI Communications Corp into a tailspin late on Thursday when information was disclosed on the Telerate wire that IBM is exploring the potential private sale of its $400m in MCI preferred: the company stresses that the move reflects no change in IBM’s confidence in MCI or in the IBM and MCI relationship – which should not need saying, since IBM has been trying to disengage from its financial involvement in MCI – which began when it sold Satellite Business Systems to MCI and took equity and paper in return because MCI couldn’t pay the full price in cash – since 1988, and IBM now needs to raise cash a lot more than it needs to hold MCI preferred – but the news wiped $3 off MCI’s share price, which fell to $27.125.
