mrjo_ct
|
mrjo_ct
6 hours ago
Enron, the natural gas pipeline company turned online phenomenon, held a daylong conference in Houston for Wall Street analysts and investors. The audience, packed with financial experts on the natural gas and power industries, was wowed by all the talk of
Enron's online capabilities, especially its rapidly growing business of electronically matching buyers and sellers of numerous commodities like electricity and even network bandwidth.
The analysts were particularly receptive when Jeffrey Skilling, then Enron's president, suggested that the company's money-losing broadband network
business alone was worth $29 billion, or an extra $37 a share. He even had a nifty PowerPoint slide to explain his company's proper stock price.
Unsurprisingly, Enron's shares skyrocketed by more than 50 percent in the first half of that year. Enron, it seems, had become an Internet company, and decidedly old-economy energy-industry analysts were loath to be left
behind.
The problem is that it was all a lie. Company executives used inflated numbers and faked financial reports. The stock price plummeted and investors, including retirement plans that had invested in Enron, lost tons of money. |
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