By James Arnold BBC News Online business staff

After the collapse of Enron last year, nervous investors cast around for who was going to be next.

And at the top, or near the top, of everyone's danger list was WorldCom, America's second-biggest long-distance phone company.

During the 1990s, WorldCom was the ultimate high-stepper, doing mega-deal after mega-deal in an industry that had never been hotter.

Bernie Ebbers, its cowboy-booted founder and boss, epitomised its glamorous chutzpah.

After Enron, however, that once-lauded panache started to look dangerously like bombast.

Wake-up call

WorldCom's business model could scarcely have been more fashionable.

The company was almost single-handedly responsible for shaking up the sleepy US telecoms market.

As the monopoly of incumbent AT&T was dismantled, Mr Ebbers bought up spare telephone time and repackaged it at bargain prices.

In a low-margin business, WorldCom needed to grow to survive, and the fast-talking Mr Ebbers bought more than 75 firms during the second half of the 1990s.

At the same time, it broadened out into the full range of modish telecoms services, including internet and data traffic.

Its peak came in 1997, when it paid $37bn (�24.3bn) to take over telecoms giant MCI, snatching the firm from under the nose of Britain's BT.

Three years later, it tried to buy Sprint, an even larger rival, but was thwarted by antitrust regulators.

Wider worries

Now, of course, the firm has admitted massive fraud in its books.

Ex-milkman Ebbers was a superstar CEO

But fraud or no fraud, there was considerable reason for disquiet about the company's fundamental health.

WorldCom's shares have dropped from more than $60 in late 1999 to less than $1, mainly because revenue growth was drying up and cash reserves dwindling.

The company made drastic efforts to cut costs, including sacking thousands of staff, and merging business units - but the efforts only served to cramp its potential to generate income.

At the same time, the company seemed to be sailing rather too close to the wind: Mr Ebbers resigned in April after admitting borrowing money from the firm to cover losses he incurred in buying its shares.

The bigger they are...

With the clarity of hindsight, this sort of jiggery-pokery now seems worryingly typical of WorldCom's way of doing business.

Much of the blame is being laid at the feet of Mr Ebbers.

For years, he epitomised the firm, and basked in the glory that its splashy success brought him.

In the era of superstar CEOs, he was in the top bracket, matched only by Enron's Kenneth Lay and Jean-Marie Messier of Vivendi - two more fallen angels.

Commentators made much of Mr Ebbers' rickety background - working his way through sports college as a milkman and a nightclub bouncer - and his plain-speaking, small-town manner.

But as the past few months have shown, the brightest stars can fall to earth too.