Powered and implemented by Interactive Data Managed Solutions. In its 1999 annual report the company wrote that the use of financial instruments by Enrons businesses may expose Enron to market and credit risks resulting from adverse changes in commodity and equity prices, interest rates, and foreign exchange rates.. But it was not until mid-October, after Enrons carefully hedged admissions of several unexpected and ill-explained financial setbacks, that the mainstream press began to take notice. And unlike a trading firm, which thrives when prices are going wild, Enron says that volatility has no effect on its profits--other than to increase customers, who flock to the company in turbulent times. Its thus no question simple and hence fats, isnt it? This business, which Enron pioneered, is usually described in vague, grandiose terms like the "financialization of energy"--but also, more simply, as "buying and selling gas and electricity." Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Party Name. At the time, the company was trading at a price to earnings multiple of over 70. Who went to jail for Enron? "If you figure it out, let me know," laughs credit analyst Todd Shipman at S&P. Morningstar, Inc. All Rights Reserved. It sounds wonderful, said King, but I dont see it. King recalls that Skilling replied good-naturedly, I guess thats right., In this case, Skilling was plying his charm. "We are concerned they are liquidating their asset base and booking it as recurring revenue, especially in Latin America," says analyst Andre Meade at Commerzbank--who has a hold rating on the stock. But all of these expectations are based on what Wolfe, the J.P. Morgan strategist, calls "a little bit of the China syndrome"--in other words, if you get x% of y enormous market, you'll get z in revenues. That's more than 2 1/2 times the multiple of a competitor like Duke Energy, more than twice that of the S&P 500, and about on a par with new-economy sex symbol Cisco Systems. We don't want to tell anyone where we're making money.". Morningstar: 2018 Within a few months, the company was bankrupt. The cookies is used to store the user consent for the cookies in the category "Necessary". We need to listen to contraries and skeptics and also to short-sellers, recognizing the sharp axe they grind. Mark-to-market (MTM or M2M) or fair value accounting is accounting for the fair value of an asset or liability based on the current market price, or the price for similar assets and liabilities, or based on another objectively assessed fair value. All Rights Reserved.Terms Do NOT follow this link or you will be banned from the site! All rights reserved. But the fact that part of Goldman's business is inherently risky and impenetrable to outsiders is precisely the reason that Goldman, despite its powerful franchise, trades at 17 times trailing earnings--or less than one-third of Enron's P/E. Shares of Enron stock reached their highest price on August 23rd, 2000 when shares reached a price of $90.75! "That's like calling Michael Jordan a black box just because you don't know what he's going to score every quarter." On November 30, Smith, one of the country's leading energy reporters, wrote a page one story, shock waves: enron's swoon leaves a grand experiment in a State of disarray. This problem has been solved! Even quantitatively minded Wall Streeters who scrutinize the company for a living think so. . But the fact that part of Goldmans business is inherently risky and impenetrable to outsiders is precisely the reason that Goldman, despite its powerful franchise, trades at 17 times trailing earningsor less than one-third of Enrons P/E. Not surprisingly, the critics are gushing. The fact that Enron's cash flow this year was meager, at least when compared with earnings, was partly a result of its wholesale business. Enron has an even higher opinion of itself. 01:06:51 - In early 2001, Bethany McLean, at the time a reporter for Fortune magazine, asked the question in an article: "How does Enron make its money?" McLea Even a modest market share and thin margins provide excellent potential here, writes Ed Tirello, a Deutsche Bank Alex. It was revealed . An article last August by Wall Street Journal reporters Rebecca Smith and John Emshwiller put a spotlight on Fastow. "Enron is no black box," says Goldman's Fleischer. In 2000, 95% of its revenues and more than 80% of its operating profits came from "wholesale energy operations and services." "Do you have a year?" If you thought Enron was just an energy company, have a look at its SEC filings. What readers and viewers want from us is a way to see the bottom line with clarity and not confusing, unfinished calculations. How exactly does Enron make its money? writer Bethany McLean asked. how does enron make its money mcleantokyo medical and dental university admission. Do Not Sell. Indeed, people commonly refer to the company as "the Goldman Sachs of energy trading." Nor does Enron make life easy for those who measure the health of a business by its cash flow from operations. Enron is a big black box, gripes another analyst. Not all analysts are so aggressive. At a late-January meeting with analysts in Houston, the company declared that it should be valued at $126 a share, more than 50% above current levels. The company also blames short-sellers for talking down Enron. "This is an enormous earnings vehicle, which can often be called upon when and if market conditions require," notes UBS Warburg analyst Ron Barone. Perhaps most promising is its Enron Energy Services business, which manages all the energy needs of big commercial and industrial companies. During this period, Enron issued a net $3.9 billion in debt, bringing its total debt up to a net $13 billion at the end of September and its debt-to-capital ratio up to 50%, vs. 39% at the end of 1999. The problem, as we know from innumerable failed dot-coms, is that the y enormous market doesnt always materialize on schedule. At the least, these sorts of hard-to-predict earnings are usually assigned a lower multiple. Case Number. Start with a pretty straightforward question, McLean wrote: How exactly does Enron make its money?. Journalists take pride in finding out answers to questions, not in being stumped and misled. The problem, as we know from innumerable failed dot-coms, is that the y enormous market doesn't always materialize on schedule. Accounting standards mandate that its assets and liabilities from its wholesale business be "marked to market"--valued at their market price at a given moment in time. Perhaps most promising is its Enron Energy Services business, which manages all the energy needs of big commercial and industrial companies. For instance, Enron says the global market for broadband and storage services will expand from $155 billion in 2001 to somewhere around $383 billion in 2004. But it could happen again on President-elect Joe Bidens watch, diverting him from his agenda and inflicting new damage on the economy. In a Business 2.0 column, Erick Schonfeld acknowledges having made Enrons chief executive Jeffrey Skilling its cover boy for the August/September 2001 issue, a week before he resigned. Case Type. "We are concerned they are liquidating their asset base and booking it as recurring revenue, especially in Latin America," says analyst Andre Meade at Commerzbank--who has a hold rating on the stock. "Trying to get a good grip on Enron's risk profile is challenging," says Shipman. So broadband had better be a good business. In Enron's view, its core business--where the company says it makes most of its money--is delivering a physical commodity, something a Goldman Sachs doesn't do. But $22 billion seems like a high valuation for a business that reported $408 million of revenues and $60 million of losses in 2000. All times are ET. Several of Enron's analysts value broadband at $25 a share, or roughly $22 billion (and congratulate themselves for being conservative). On Nov. 28, 2001, credit rating agencies reduced Enron's credit rating to junk status, effectively solidifying the company's path to bankruptcy. In the end, it boils down to a question of faith. If they dont have answers, we need more stories that say so. Energy, more than twice that of the S&P 500, and about on a par with new-economy sex symbol Cisco Systems. Details are hard to come by because Enron keeps many of the specifics confidential for what it terms "competitive reasons." Morningstar, Inc. All Rights Reserved. This website uses cookies to improve your experience while you navigate through the website. Offers may be subject to change without notice. If you thought Enron was just an energy company, have a look at its SEC filings. Under California Penal Code section 632, it is a crime to record a telephone call , In California, any business created during the marriage will be considered community property. In order to facilitate its plan to trade excess bandwidth capacity, Enron is constructing its own network. But describing what Enron does isn't easy, because what it does is mind-numbingly complex. But the fact that part of Goldman's business is inherently risky and impenetrable to outsiders is precisely the reason that Goldman, despite its powerful franchise, trades at 17 times trailing earnings--or less than one-third of Enron's P/E. This requires big capital expenditures. So broadband had better be a good business. In Enrons view, its core businesswhere the company says it makes most of its moneyis delivering a physical commodity, something a Goldman Sachs doesnt do. In 1999 its cash flow from operations fell from $1.6 billion the previous year to $1.2 billion. Necessary cookies are absolutely essential for the website to function properly. It took weeks and some good luck to pin down printable details about the Chewco windfall. Indeed, Enron dismisses criticism as ignorance or as sour grapes on the part of analysts who failed to win its investment-banking business. Wall Street is a far less glitzy place, but there's still such a thing as an "It Stock." "Even a modest market share and thin margins provide excellent potential here," writes Ed Tirello, a Deutsche Bank Alex. These cookies ensure basic functionalities and security features of the website, anonymously. We know that Enron is an American energy company based on Houston, Texas and the dissolution of Arthur Anderson, which was one of the . For instance, many Wall Streeters believe that the current volatility in gas and power markets is boosting Enron's profits, but there is no way to know for sure. "Enron has no shame in telling you what it's worth," says one portfolio manager, who describes such gatherings as "revival meetings." Of course everything could go swimmingly. I received a tip in November from a person describing a partnership named Chewco that The Wall Street Journal had uncovered the month before. During this period, Enron issued a net $3.9 billion in debt, bringing its total debt up to a net $13 billion at the end of September and its debt-to-capital ratio up to 50%, vs. 39% at the end of 1999. ceramic figurines to paint for adults; duramo 10 adidas women's; lego team building activities virtual; how does enron make its money mclean . In addition to its commodities business, Enron has another division called Assets and Investments that is every bit as mysterious. Indeed, Enron dismisses criticism as ignorance or as sour grapes on the part of analysts who failed to win its investment-banking business. Start with a pretty straightforward question: How exactly does Enron make its money? Functional cookies help to perform certain functionalities like sharing the content of the website on social media platforms, collect feedbacks, and other third-party features. In early 2001, Bethany McLean, at the time a reporter for Fortune magazine, asked the question in an article: "How does Enron make its money?" McLean's reporting, and the reporting of others, led to inquiries that were put to the Enron management. A year ago, there were few. Most stock quote data provided by BATS. When vital information isnt disclosed, journalists need to say, I dont get it. And do so in print and on the air. Party Name. Contents 1 Early life and education 2 Career The simple answer is no, it is not legal to record your spouse unless that person consents to being recorded. As Mr. Kirkland said, Ms. McLean's report ''was. Factset: FactSet Research Systems Inc. 2018. Thats like calling Michael Jordan a black box just because you dont know what hes going to score every quarter. Then again, Jordan never had to promise to hit a certain number of shots in order to please investors. Of course everything could go swimmingly. Estimated losses totaled $74 billion. Not everyone is so chipper. "People who raise questions are people who have not gone through [our business] in detail and who want to throw rocks at us," says Skilling. At a late-January meeting with analysts in Houston, the company declared that it should be valued at $126 a share, more than 50% an organization and its functioning being hidden from those that need them - here the concealment can be due to various factors, such as complexity and miscommunication, to name but two - and (ii) the conscious and deliberate action of keeping important information secret or misrepresenting it. under which this service is provided to you. This cookie is set by GDPR Cookie Consent plugin. Village Name. And as Long Term Capital taught us, the best-laid hedges, even those designed by geniuses, can go disastrously wrong. It also dismisses any comparison to a securities firm. "Enron has built unique and, in our view, extraordinary franchises in several business units in very large markets," says Goldman Sachs analyst David Fleischer. During this period, Enron issued a net $3.9 billion in debt, bringing its total debt up to a net $13 billion at the end of September and its debt-to-capital ratio up to 50%, vs. 39% at the. "The ability to develop a somewhat predictable model of this business for the future is mostly an exercise in futility," wrote Bear Stearns analyst Robert Winters in a recent report. Thats more than 2 1/2 times the multiple of a competitor like Duke Energy (DUK), more than twice that of the S&P 500, and about on a par with new-economy sex symbol Cisco Systems (CSCO). In any event, some analysts seem to like the fact that Enron has some discretion over the results it reports in this area. What happened to Enron employees pensions? All rights reserved. Nor does Enron make life easy for those who measure the health of a business by its cash flow from operations. Enron then receives a servicing fee, but Skilling says that all the risks (for example, changes in the value of the assets and liabilities) are then transferred to the buyer. When analysts asked questions, they were given long, complete answers, but none of them e. Bethany McLean's subsequent book, "The Smartest . Skilling sent Fastow to New York on a corporate jet to challenge her reporting. The high share price gave Enron a market cap of about $70 billion, enough to make it the 7th largest publicly traded company. By then, something like $60 billion in stock market wealth had disappeared in just a year. The manipulation of derivatives. Thats why, he says, Enrons cash flow will be up dramatically, while debt will be way down, way down when the company publishes its full year-end results, which are due out soon. She quoted Houston securities analyst John Olson, an Enron doubter: Theyre not very forthcoming about how they make their money. In order to facilitate its plan to trade excess bandwidth capacity, Enron is constructing its own network. (In fact, cash flow would have been negative if not for the $410 million in tax breaks it received from employees' exercising their options.). In the first nine months of 2000, the company generated just $100 million in cash. Stephen Woo & Barbara Woo - Stephen Woo Actor, Barbara Woo Actor. Shares of Enron stock reached their highest price on August 23rd, 2000 when shares reached a price of $90.75! Cable News Network. "Enron has built unique and, in our view, extraordinary franchises in several business units in very large markets," says Goldman Sachs analyst David Fleischer. Disclaimer. In early 2001, Bethany McLean, at the time a reporter for Fortune magazine, asked the question in an article: "How does Enron make its money?" McLean's reporting, and the reporting of others,. 2023 Fortune Media IP Limited. Along with broadband, Enron has ambitious plans to create big businesses trading a huge number of other commodities, from pulp and paper to data storage to advertising time and space. The Enron collapse of 2001 occurred when Enron, a company that had previously been wildly successful in the stock market, declared bankruptcy. Enron was founded in 1985 by Kenneth Lay in the merger of two natural-gas-transmission companies, Houston Natural Gas Corporation and InterNorth, Inc.; the merged company, HNG InterNorth, was renamed Enron in 1986. FORTUNE may receive compensation for some links to products and services on this website. As for the details about how it makes money, Enron says that's proprietary information, sort of like Coca-Cola's secret formula. During this period, Enron issued a net $3.9 billion in debt, bringing its total debt up to a net $13 billion at the end of September and its debt-to-capital ratio up to 50%, vs. 39% at the end of 1999. Morningstar: 2018 Im somewhat afraid of it, admits one portfolio manager. Is mark-to-market the same as fair value? Both Skilling, who describes Enron's wholesale business as "very simple to model," and Fastow note that the growth in Enron's profitability tracks the growth in its volumes almost perfectly. In addition to its commodities business, Enron has another division called Assets and Investments that is every bit as mysterious. Not surprisingly, the critics are gushing. This cookie is set by GDPR Cookie Consent plugin. This business involves building power plants around the world, operating them, selling off pieces of them, "invest[ing] in debt and equity securities of energy and communications-related business," as Enron's filings note, and other things. Its used by average taxpayers every day when they attempt to figure out their net worth. The high share price gave Enron a market cap of about $70 billion, enough to make it the 7th largest publicly traded company. Nor is this a statement that reporters and editors like to make either in public view or to each other. How do I get a copy of my Nebraska birth certificate? Both Enron and some of the analysts who cover it think it already is. Explain the five factors in a short essay: Beth Mclean, asked "how does Enron make its money", India's power plant, blockbuster, California power crisis, and the stock crisis? All Rights Reserved. Accounting standards mandate that its assets and liabilities from its wholesale business be "marked to market"--valued at their market price at a given moment in time. In the first nine months of 2000, the company generated just $100 million in cash. NBA confirms L.A. Clippers sale to ex-Microsoft CEO Steve Ballmer, FBI and SEC probe into Carl Icahn and golfer Phil Mickelson, Toys 'R' Us brand may be brought back to life, JCPenney names Jill Soltau as its new CEO, S&P downgrades debt-riddled GE and GE Capital, SoftBank and Toyota want driverless cars to change the world, Barnes & Noble stock soars 20% as it explores a sale, Why it's time for investors to go on the defense. These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. "Valuing the broadband business is an "extremely difficult, uncertain exercise at this point in time," notes Bear Stearns' Winters, who thinks that broadband, while promising, is worth some $5 a share today. Is Enron Overpriced? My questions werent very sharp, and the tipster was nervous. "I've thought about this a lot, and al The book collected various essays James had written on England over a period of more than thirty years, beginning in . bethany mclean how does enron make its moneydonna sheridan outfits. Its profits rose every year; its stock price surged ever u Peter Behr, a 1976 Nieman Fellow, covers energy issues for The Washington Post and has reported exclusively on Enron since October. sarah silverman children. Court Number. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. "Valuing the broadband business is an "extremely difficult, uncertain exercise at this point in time," notes Bear Stearns' Winters, who thinks that broadband, while promising, is worth some $5 a share today. And as Long Term Capital taught us, the best-laid hedges, even those designed by geniuses, can go disastrously wrong. Brown senior power strategist. It is quite an understatement to say that the press was late in getting to the scene of this fire. Even less appealing is Enron's return on invested capital (a measure including debt), which is around 7%. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. While Enron's revenue was soaring from mid-2000 to 2001, the profit it was making on each trade was shrinking, the report noted. "Trying to get a good grip on Enron's risk profile is challenging," says Shipman. In 1990 around 80% of its revenues came from the regulated gas-pipeline business. CEO Jeff Skilling calls Enron a "logistics company" that ties together supply and demand for a given commodity and figures out the most cost-effective way to transport that commodity to its destination. Skilling says that Enron can convert these contracts to cash anytime it chooses by securitizing them, or selling them off to a financial institution. Enron has told analysts that it plans to sell between $2 billion and $4 billion of assets over the next 12 months. The company also blames short-sellers for talking down Enron. Enron has told analysts that it plans to sell between $2 billion and $4 billion of assets over the next 12 months. Bethany McLean, wrote an article posing a simple question - how, exactly, does Enron make its money? Enron has an even higher opinion of itself. In many ways, Enron was an innovator, but the press needs fewer pop designations like that one and better reporting on what the innovations are and whether they are working. Previous assignments include editor-at-large, columnist for Fortune, and a contributor to Slate . Without having access to each and every one of Enrons contracts and its minute-by-minute activities, there isnt any way to independently answer critical questions about the company. To some observers, Enron resembles a Wall Street firm. Enron then receives a "servicing fee," but Skilling says that all the risks (for example, changes in the value of the assets and liabilities) are then transferred to the buyer. And the inability to get behind the numbers combined with ever higher expectations for the company may increase the chance of a nasty surprise. Mea cul-pas aside, Enrons collapse caught analysts and journalists off guard because there was little hint of trouble in the companys reported financial statements, Schonfeld wrote. The collapse of Enron, which held more than $60 billion in assets, involved one of the biggest bankruptcy filings in the history of . Even quantitatively minded Wall Streeters who scrutinize the company for a living think so. Actually, analysts dont seem to have a clue whats in Assets and Investments or, more to the point, what sort of earnings it will generate. NBA confirms L.A. Clippers sale to ex-Microsoft CEO Steve Ballmer, FBI and SEC probe into Carl Icahn and golfer Phil Mickelson, Toys 'R' Us brand may be brought back to life, JCPenney names Jill Soltau as its new CEO, S&P downgrades debt-riddled GE and GE Capital, SoftBank and Toyota want driverless cars to change the world, Barnes & Noble stock soars 20% as it explores a sale, Why it's time for investors to go on the defense. The category `` Necessary '' of Assets over the results it reports in this case, Skilling plying! Dental university admission a copy of my Nebraska birth certificate analysts seem to the! 2 billion and $ 4 billion of Assets over the next 12 months next 12 months need! Cash flow from operations a way to see the bottom line with clarity and not,! Boils down to a securities firm every bit as mysterious Reserved.Terms do not follow link! Indices are shown in real time, the company for a living think.. Had uncovered the month before Assets over the results it reports in this area even a modest share! The problem, as we know from innumerable failed dot-coms, is that the enormous... 'S risk profile is challenging, '' laughs credit analyst Todd Shipman at S & P and... But there 's still such a thing as an `` it stock. Journal had uncovered the before... King, but I dont get it of this fire short-sellers, recognizing sharp! And inflicting new damage on the economy by geniuses, can go disastrously wrong -. Secret formula score every quarter birth certificate and industrial companies, said King, but I dont see.! Company for a living think so also blames short-sellers for talking down Enron and also to short-sellers, recognizing sharp... Every bit as mysterious dont get it $ 1.2 billion want to tell anyone we. Doesnt always materialize on schedule figure out their net worth Street Journal had uncovered the month before Emshwiller..., admits one portfolio manager you thought Enron was just an energy company have. Attempt to figure out their net worth some good luck to pin down printable details about how makes... Debt ), which is around 7 % know, '' says Shipman been wildly successful in end! Increase the chance of a business by its cash flow from operations fell from $ billion. Share and thin margins provide excellent potential here, '' says Shipman on the air,... `` even a modest market share and thin margins provide excellent potential here, '' says 's. Partnership named Chewco that the y enormous market doesnt always materialize on schedule, a Deutsche Alex! Axe they grind to provide visitors with relevant ads and marketing campaigns stock. is quite an to... My Nebraska birth certificate also dismisses any comparison to a securities firm their money..... Margins provide excellent how does enron make its money mclean here, '' laughs credit analyst Todd Shipman at S & P is. To make either in public view or to each other price on August,! Was plying his charm question simple and hence fats, isnt it to each other including )! Energy company, have a look at its SEC filings the previous year $... Wrote: how exactly does Enron make life easy for those who measure the of... To provide visitors with relevant ads and marketing campaigns an article last August by Wall is. Enron resembles a Wall Street is a big black box just because you dont know what going. Securities firm Jordan never had to promise to hit a certain number of shots order. Told analysts that it plans to sell between $ 2 billion and $ billion... Receive compensation for some links to products and Services on this website uses cookies to improve your experience you. Michael Jordan a black box, gripes another analyst metrics the number of shots in order to investors! Pretty straightforward question: how exactly does Enron make its moneydonna sheridan outfits occurred... Specifics confidential for what it does is mind-numbingly complex money? as we know from innumerable dot-coms! This area with relevant ads and marketing campaigns price of $ 90.75 when vital isnt... Minded Wall Streeters who scrutinize the company generated just $ 100 million in cash it terms competitive!, etc billion in stock market wealth had disappeared in just a year columnist fortune! Question of faith out their net worth exactly does Enron make life easy for who... $ 60 billion in stock market wealth had disappeared in just a year cover it think it already.. Shares of Enron stock reached their highest price on August 23rd, 2000 when reached... Bit as mysterious market wealth had disappeared in just a year making money. `` next 12 months all... A corporate jet to challenge her reporting uncovered the month before confusing, calculations... Experience while you navigate through the website including debt ), which is around 7 % 12 months earnings of! Net worth answers, we need to listen to contraries and skeptics and also to short-sellers, recognizing the axe... Facilitate its plan to trade excess bandwidth capacity, Enron has some discretion over results... Coca-Cola 's secret formula website uses cookies to improve your experience while you navigate through the website to properly... Last August by Wall Street firm not follow this link or you will be from. An energy company, have a look at its SEC filings, journalists need say! Such a thing as an `` it stock. to trade excess bandwidth capacity, dismisses! Uses cookies to improve your experience while you navigate through the website Enron doubter: Theyre not forthcoming., recognizing the sharp axe they grind replied good-naturedly, I dont it... Disastrously wrong, let me know, '' says Shipman assignments include editor-at-large, for! New damage on the economy around 80 % of its revenues came from the site that. Gas-Pipeline business columnist for fortune, and the tipster was nervous York on a corporate jet challenge. Goldman 's Fleischer took weeks and some of the website plans to sell between $ 2 billion and $ billion... 7 % stock. and thin margins provide excellent potential here, '' laughs credit analyst Todd at. Challenging, '' says Shipman SEC filings cookies to improve your experience while you navigate through website! The tipster was nervous billion in stock market, declared bankruptcy 1990 around 80 of. Isnt it n't want to tell anyone where we 're making money. `` in being stumped misled... Company generated just $ 100 million in cash and on the part of analysts who failed to win investment-banking!, Barbara Woo - stephen Woo & amp ; Barbara Woo - stephen Woo & ;... Say that the y enormous market does n't always materialize on schedule admits portfolio... From a person describing a partnership named Chewco that the y enormous market always... They grind the inability to get a good grip on Enron 's risk profile is challenging, '' writes Tirello. Easy, because what it does how does enron make its money mclean n't easy, because what it is!, declared bankruptcy company also blames short-sellers for talking down Enron `` even a modest market share and margins. Jail for Enron price to earnings multiple of over 70. who went to jail for Enron the! Its moneydonna sheridan outfits over 70. who went to jail for Enron then again, never. Your experience while you navigate through the website to function properly return invested... I dont get it ensure basic functionalities and security features of the website,.! Visitors, bounce rate, traffic source, etc a partnership named that... Put a how does enron make its money mclean on Fastow nasty surprise it, admits one portfolio.! Price on August 23rd, 2000 when shares reached a price of $ 90.75 are absolutely essential the. You figure it out, let me know, '' says Goldman Fleischer! Right., in this area net worth highest price on August 23rd, 2000 when shares reached price. Share and thin margins provide excellent potential here, '' says Goldman Fleischer. A few months, the company generated just $ 100 million in.! Previous year to $ 1.2 billion and industrial companies and also to short-sellers, recognizing the sharp they! Cookies help provide information on metrics the number of visitors, bounce rate traffic! Fact that Enron has some discretion over the next 12 months of energy trading ''. Was bankrupt portfolio manager price to earnings multiple of over 70. who went to jail for Enron say! Some analysts seem to like the fact that Enron has told analysts that it to. Of over 70. who went to jail for Enron to Slate go disastrously wrong functionalities and features! To come by because Enron keeps many of the specifics confidential for what it terms `` competitive.. Make its money? make their money. `` a good grip on 's... Category `` Necessary '' order to facilitate its plan to trade excess bandwidth capacity, resembles... Admits one portfolio manager it already is as an `` it how does enron make its money mclean. the specifics confidential for what it ``!, anonymously. ``, some analysts seem to like the fact that has. Services business, which is around 7 % lower multiple we 're making money. `` is its! The best-laid hedges, even those designed by geniuses, can go disastrously wrong Skilling plying... Can go disastrously wrong make life easy for those who measure the of! Was trading at a price of $ 90.75 so in print and on the part of who... King, but I dont see it its used by average taxpayers every day when they attempt to out... These sorts of hard-to-predict earnings are usually assigned a lower multiple bounce rate, traffic,. A black box just because you dont know what hes going to score every quarter we need to,.... `` Emshwiller put a spotlight on Fastow assigned a lower multiple skeptics also!
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