Opinion ID: 3061983
Heading Depth: 2
Heading Rank: 3

Heading: The Collapse of Qwest Stock

Text: -9- During the next few months, the internal warnings regarding overreliance on a dwindling pool of IRU sales were increasingly confirmed. On August 15, Qwest disclosed its IRU sales in a filing with the SEC. App. 1672. The immediate effect on Qwest’s stock price was negligible, but it had been in decline both before and after. Lee Wolfe testified that “there had been . . . some disclosure after the first quarter,” that some of Qwest’s revenue was one-time rather than recurring, “[b]ut they were not—the magnitude was not known,” until August. App. 1673. On September 10, 2001, Mr. Nacchio lowered Qwest’s public guidance by one billion dollars. Mr. Wolfe testified that Mr. Nacchio and Drake Tempest had sought to put enough time between the disclosure regarding reliance on IRU sales and the change in guidance that it would not seem as if Mr. Nacchio had been concealing information. By September 21, Qwest’s stock had fallen 60% from its January level. During the same period, the Dow Jones Industrial Average dropped approximately 24% and the NASDAQ composite index dropped 46%. 2