Tuesday, February 3, 2009

Level 3 - Managing in Turbulent Times

Broomfield, Colorado based Level 3 Communications is profiled in today's Wall Street Journal. The article talks about how the company managed to survive not one but two financial storms. As the playing field in telecommunications and credit market shifted and became too uneven for many of the telecom players, Level 3 managed to fund its operations and save jobs.
How did they do it? The management convinced the original investors to do more and bought back some of their old debts for cents on the dollar.

"These guys pull rabbits out of the hat," says Jefferies & Co. Inc. credit analyst Romeo Reyes. "They've been shrewd about taking advantage of what the market offers."

The company did not report positive earnings since 1999 and saw its market capitalization shrink to $1.6 billion, almost half of its value in from the highs of June 2008. What is the prognosis?

At this point in the crisis, however, survival is victory. And that should offer some inspiration for managers rebuffed by the banks: If Level 3 can stay in the game, there just may be hope yet.

Saving jobs in this economy is indeed truly inspirational act.

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