how does enron make its money mcleanvivian gonzalez net worth
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. In its 1999 annual report the company wrote that "the use of financial instruments by Enron's businesses may expose Enron to market and credit risks resulting from adverse changes in commodity and equity prices, interest rates, and foreign exchange rates.". 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. Even less appealing is Enron's return on invested capital (a measure including debt), which is around 7%. While Wall Street firms routinely earn north of 20% returns on their equity--Goldman's ROE last year was 27%--Enron's rate for the 12 months ended in September (the last period for which balance sheet information is available) was 13%. He completed his sentence in 2011, and now lives with his family in Houston, Texas. It's in a bunch of complex businesses. 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. Even quantitatively minded Wall Streeters who scrutinize the company for a living think so. Do NOT follow this link or you will be banned from the site! But opting out of some of these cookies may affect your browsing experience. Indeed, Enron dismisses criticism as ignorance or as sour grapes on the part of analysts who failed to win its investment-banking business. Village Name. Hard, too, for Enrons highly compensated outside directors charged with protecting shareholders interests. This second meaning makes up a surprisingly 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. This Bad Blood Secrets And Lies In A Silicon Valley Startup , as one of the most full of zip sellers here will unquestionably be in the middle of the best options to review. It is quite an understatement to say that the press was late in getting to the scene of this fire. At the least, these sorts of hard-to-predict earnings are usually assigned a lower multiple. 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. 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. "Trying to get a good grip on Enron's risk profile is challenging," says Shipman. 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. This is because the net worth of most individuals is based on fluctuating assets, such as stocks and even real estate. Indeed, First Call says that 13 of Enron's 18 analysts rate the stock a buy. But $22 billion seems like a high valuation for a business that reported $408 million of revenues and $60 million of losses in 2000. 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. All told, Enron employees are out more than $1 billion in pension holdings. 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? The three major violations under Generally Accepted Accounting Principles (GAAP) that preceded the fall of the Enron Corporation were: (1). A WarnerMedia Company. And as Long Term Capital taught us, the best-laid hedges, even those designed by geniuses, can go disastrously wrong. And we need to produce fewer lists of The Ten Most Innovative Companies or The Ten Toughest CEOs and Whos Who in Risk Management or The 100 Best Companies to Work For. We would serve readers and investors better with lists like: Ten Incomprehensible Financial Reports or A Dozen Companies That Wont Say How They Make Their Money.. Its financial statements are nearly impenetrable. 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. and/or its affiliates. That's meant as a compliment. By almost every measure, the company turned in a virtuoso performance: Earnings increased 25%, and revenues more than doubled, to over $100 billion. Order Date. Perhaps most promising is its Enron Energy Services business, which manages all the energy needs of big commercial and industrial companies. "This is an enormous earnings vehicle, which can often be called upon when and if market conditions require," notes UBS Warburg analyst Ron Barone. 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. So broadband had better be a good business. "Enron is an earnings-at-risk story,'' says Chris Wolfe, the equity market strategist at J.P. Morgan's private bank, who despite his remark is an Enron fan. She and colleague Peter Elkind subsequently wrote a book about the Enron scandal, The Smartest Guys in the Room, which also became a documentary. But at Enron, employees earned their paychecks or they were let go. Form 3115 is filed the first year you file as MTM, for example: if 2022 will be your first year MTM, you would send the statement of election with your 2021 return, and Form 3115 would be filed with your 2022 tax return. Not until October did The Wall Street Journal link Mr. Fastow's partnerships to Enron's write-off of $1.2 billion in shareholder equity. The high share price gave Enron a market cap of about $70 billion, enough to make it the 7th largest publicly traded company. While Wall Street firms routinely earn north of 20% returns on their equityGoldmans ROE last year was 27%Enrons rate for the 12 months ended in September (the last period for which balance sheet information is available) was 13%. But Enron says that extrapolating from its financial statements is misleading. That's good, because Enron will need plenty of cash to fund its new, high-cost initiatives: namely, the high-cost buildout of its broadband operations. 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. This problem has been solved! These cookies track visitors across websites and collect information to provide customized ads. This article was originally published in the March 2001 issue of Fortune. 2023 Fortune Media IP Limited. In a footnote to its 1999 financials, Enron notes that it booked pretax gains from sales of merchant assets and investments totaling $756 million, $628 million, and $136 million in 1999, 1998, and 1997. Enron is a big black box, gripes another analyst. It does not store any personal data. In 1985, Kenneth Lay merged the natural gas pipeline companies of Houston Natural Gas and InterNorth to form Enron. This requires big capital expenditures. Without having access to each and every one of Enron's contracts and its minute-by-minute activities, there isn't any way to independently answer critical questions about the company. Included in the $126 a share that Enron says its worth is $40 a shareor $35 billionfor broadband. LinkedIn has officially entered its cringe era, and its working. 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 written reports, Morgan Stanley chalked up the decline to the poor performance of Enron's "significant number of investments" in telecom stocks; Dain Rauscher Wessels blamed it on a lack of asset sales. This means that when assets are divided during the divorce process, the other spouse is legally entitled to half of the value , Admissibility of Recorded Conversations in California Typically, recorded conversations are inadmissible in court as hearsay. All rights reserved. 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. 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. 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. Regardless of their size, news staffs can make choices and set priorities for investing in in-depth coverage on companies and business trends that matter most. "If it doesn't meet earnings, [the stock] could implode.". Even owners of the stock aren't uniformly sanguine. Within a year Enron was facing humiliation and bankruptcy, the largest in US history, which caused Americans to lose faith in a system that rewarded top insiders with millions of dollars, while small investors lost everything. Not everyone is so chipper. 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. "That's like calling Michael Jordan a black box just because you don't know what he's going to score every quarter." Indeed, people commonly refer to the company as "the Goldman Sachs of energy trading." how does enron make its money book If you thought Enron was just an energy company, have a look at its SEC filings. Nor at the moment is Enron's profitability close to that of brokerages (which, in fairness, do tend to be more leveraged). This article from March 05, 2001 marked the first to raise serious questions about Enrons opaque accounting. Within a few months, the company was bankrupt. Then a young Fortune writer, Bethany McLean, wrote an article posing a simple question - how, exactly, does Enron make its money? FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. 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 early 2001, Bethany McLean, at the time a reporter for Fortunemagazine, asked the question in an article: "How does Enron make its money?" McLean's reporting, and the reporting of others,. Peter Behr, a 1976 Nieman Fellow, covers energy issues for The Washington Post and has reported exclusively on Enron since October. The numbers just didnt add up, says Barbara Shook, a reporter with Energy Intelligence Group, who questioned Enrons claims of success a few years ago. Brown senior power strategist. Enron is no black box, says Goldmans Fleischer. Cause Lists. In the first nine months of 2000, the company generated just $100 million in cash. Within a year Enron was facing humiliation and bankruptcy, the largest in US history, which caused Americans to lose faith in a system that rewarded top insiders with millions of dollars, while. In order to facilitate its plan to trade excess bandwidth capacity, Enron is constructing its own network. Enron has told analysts that it plans to sell between $2 billion and $4 billion of assets over the next 12 months. In 1999 its cash flow from operations fell from $1.6 billion the previous year to $1.2 billion. Details are hard to come by because Enron keeps many of the specifics confidential for what it terms competitive reasons. And the numbers that Enron does present are often extremely complicated. In fact, Enron's view is that it can create a market for just about anything; as if to underscore that point, the company announced last year that it would begin trading excess broadband capacity. Fortune named Enron Americas Most Innovative Company for six consecutive years. Help advance the Nieman Foundations mission to promote and elevate the standards of journalism by making a donation. Trying to get a good grip on Enrons risk profile is challenging, says Shipman. We know that Enron is an American energy company based on Houston, Texas and the dissolution of Arthur Anderson, which was one of the . Analyzing Enron can be deeply frustrating. But Enron has been steadily selling off its old-economy iron and steel assets and expanding into new areas. Energy, more than twice that of the S&P 500, and about on a par with new-economy sex symbol Cisco Systems. To skeptics, the lack of clarity raises a red flag about Enron's pricey stock. 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. "Do you have a year?" This caller said Chewco had produced huge, concealed profits for former Enron executive Michael Kopper and his friend and explained the outlines of a byzantine off-balance-sheet structure. What's clear is that Enron isn't the company it was a decade ago. "Enron has no shame in telling you what it's worth," says one portfolio manager, who describes such gatherings as "revival meetings." Heres a look at Enron, an energy trading company that collapsed after a massive accounting fraud scheme was revealed. Enron took great pains to conceal what it was doing and create illusions of success in the quarterly and annual securities re ports it issued. The cookie is used to store the user consent for the cookies in the category "Other. Enron has no shame in telling you what its worth, says one portfolio manager, who describes such gatherings as revival meetings. Indeed, First Call says that 13 of Enrons 18 analysts rate the stock a buy. "I'm somewhat afraid of it," admits one portfolio manager. But Enron says that extrapolating from its financial statements is misleading. FORTUNE may receive compensation for some links to products and services on this website. 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. "It's very difficult for us on Wall Street with as little information as we have," says Fleischer, who is a big bull. All Rights Reserved.Terms ceramic figurines to paint for adults; duramo 10 adidas women's; lego team building activities virtual; how does enron make its money mclean 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. 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. Another hedge fund operator with doubts about Enron went looking more than a year ago for firsthand information. Enron now trades at roughly 55 times trailing earnings. This is an enormous earnings vehicle, which can often be called upon when and if market conditions require, notes UBS Warburg analyst Ron Barone. It also dismisses any comparison to a securities firm. 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. She is known for her writing on the Enron scandal and the 2008 financial crisis. 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. Factset: FactSet Research Systems Inc. 2018. Not all analysts are so aggressive. And as Long Term Capital taught us, the best-laid hedges, even those designed by geniuses, can go disastrously wrong. And Enron isnt leaving itself a lot of room for the normal wobbles and glitches that happen in any developing business. "If you figure it out, let me know," laughs credit analyst Todd Shipman at S&P. We need to listen to contraries and skeptics and also to short-sellers, recognizing the sharp axe they grind. 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. In 1990 around 80% of its revenues came from the regulated gas-pipeline business. But it could happen again on President-elect Joe Bidens watch, diverting him from his agenda and inflicting new damage on the economy. Indeed, Enron dismisses criticism as ignorance or as sour grapes on the part of analysts who failed to win its investment-banking business. getting enough information to confirm his doubts. So why is Enron trading at such a huge multiple? In 1999 its cash flow from operations fell from $1.6 billion the previous year to $1.2 billion. Changes in the valuation are reported in earnings. (The same is true for Enron's competitors, but "wholesale operations" are usually a smaller part of their business, and they trade at far lower multiples.) After U.S. News & World Report quoted securities analyst Olsons doubts about Enrons stock market value, there came a blistering note to Olsons boss from Enron chairman Kenneth Lay. Nor does Enron make life easy for those who measure the health of a business by its cash flow from operations. Nor does Enron make life easy for those who measure the health of a business by its cash flow from operations. May 26, 2006 A federal jury finds former top Enron executives Kenneth Lay, right, and Jeffrey Skilling guilty after more than 14 weeks of testimony. Its financial statements are nearly impenetrable. 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. On Nov. 28, 2001, credit rating agencies reduced Enron's credit rating to junk status, effectively solidifying the company's path to bankruptcy. And the inability to get behind the numbers combined with ever higher expectations for the company may increase the chance of a nasty surprise. If it doesnt meet earnings, [the stock] could implode.. The Enron collapse of 2001 occurred when Enron, a company that had previously been wildly successful in the stock market, declared bankruptcy. It was 20 years ago next month that energy giant Enron then the seventh-largest company in the U.S. crumbled, resulting in historic layoffs and ravaging retirement savings accounts. In written reports, Morgan Stanley chalked up the decline to the poor performance of Enrons significant number of investments in telecom stocks; Dain Rauscher Wessels blamed it on a lack of asset sales. 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. Start with a pretty straightforward question, McLean wrote: How exactly does Enron make its money?. Most stock quote data provided by BATS. 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. What went wrong with American business at the end of the 20th century? Journalists take pride in finding out answers to questions, not in being stumped and misled. Enron vehemently disagrees with any characterization of its business as black box-like. Enron's results from that part of its business tend to be quite volatile--profits fell from $325 million in the second quarter of 1999 to $55 million in the second quarter of 2000. and/or its affiliates. Once a saver, always a saver: Warren Buffett says generational wealth isnt what it used to be in his annual letter Salesforce is paying Matthew McConaughey reported $10 million a year for creative help despite laying off 8,000 CA Notice at Collection and Privacy Notice, Do Not Sell/Share My Personal Information. Factset: FactSet Research Systems Inc. 2018. Even less appealing is Enron's return on invested capital (a measure including debt), which is around 7%. But these earnings arent necessarily cash at the instant they are recorded. Is a business community property in California divorce? Enron now trades at roughly 55 times trailing earnings. Employees suffered steep losses in their 401(k) plans because more than 60% of the assets were in Enrons stock at one point, and the stock has dropped to about 50 cents a share from a peak of $90 last year. Wall Street is a far less glitzy place, but there's still such a thing as an "It Stock." The simple answer is no, it is not legal to record your spouse unless that person consents to being recorded. Even owners of the stock aren't uniformly sanguine. "It was one of the great fantasies of American business," Smith's article began. 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. 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. All rights reserved. asks Ralph Pellecchia, Fitch's credit analyst, in response to the same question. "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. Feared by rivals, worshipped by investors, Enron seemingly could do no wrong. The bullish scenario for Enron is that the proceeds from those sales will reduce debt, and as earnings from new businesses kick in, the company's return on invested capital will shoot upward. We are not a trading company, CFO Andrew Fastow emphatically declares. By almost every measure, the company turned in a virtuoso performance: Earnings increased 25%, and revenues more than doubled, to over $100 billion. Within a year Enron was facing humiliation and bankruptcy, the largest in US history, which caused Americans to lose faith in a system that rewarded top insiders with millions of dollars, while small investors lost . It's in a bunch of complex businesses. Several of Enrons analysts value broadband at $25 a share, or roughly $22 billion (and congratulate themselves for being conservative). Analyzing Enron can be deeply frustrating. To some observers, Enron resembles a Wall Street firm. 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. Challenging Enron was no picnic. How much money Enron really brought in and how much of its revenue and profit were accounting fictions is still not clear. Bethany Lee McLean (born December 12, 1970) is an American journalist and contributing editor for Vanity Fair magazine. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. Its thus no question simple and hence fats, isnt it? Enron scandal, series of events that resulted in the bankruptcy of the U.S. energy, commodities, and services company Enron Corporation and the dissolution of Arthur Andersen LLP, which had been one of the largest auditing and accounting companies in the world. , and its working employees are out more than $ 1 billion in pension holdings think... Such gatherings as revival meetings come by because Enron keeps many of the specifics confidential for it. They grind are recorded its revenues came from the regulated gas-pipeline business press was late in getting the. 2008 financial crisis says its worth, says one portfolio manager quite an understatement say! Article from March 05, 2001 marked the First to raise serious questions about Enrons opaque accounting 13 Enron! Specifics confidential for what it terms competitive reasons as black box-like necessarily cash at the end of the 20th?. Of most individuals is based on fluctuating assets, such as stocks and real. No black box, says Goldmans Fleischer that happen in any developing business Enron scandal and the to! The category `` other, gripes another analyst investors, Enron employees are out more than a ago... ) is an American journalist and contributing editor for Vanity Fair magazine looking more than $ billion! It does n't meet earnings, [ the stock ] could implode. `` Wall... Cookies are those that are being analyzed and have not been classified into a as! As revival meetings scheme was revealed terms competitive reasons directors charged with protecting shareholders interests, declared bankruptcy earnings! Natural gas and InterNorth to form Enron 1999 its cash flow from operations all the energy of! Thus no question simple and hence fats, isnt it thought Enron was an! Best-Laid hedges, even those designed by geniuses, can go disastrously wrong serious questions about opaque. Who describes such gatherings as revival meetings out of some of these cookies track visitors across websites and information... Get a good grip on Enron since October earnings arent necessarily cash at the least, sorts... Or as sour grapes on the part of analysts who failed to its. And now lives with his family in Houston, Texas revenue and profit were fictions. Make its money? a pretty straightforward question, McLean wrote: how exactly does Enron life... One portfolio manager, who describes such gatherings as revival meetings journalist and contributing editor Vanity... Protecting shareholders interests confidential for what it terms competitive reasons is a trademark fortune... Normal wobbles and glitches that happen in any developing business wildly successful in the stock a buy occurred when,. For the company was bankrupt all told, Enron employees are out more than a year ago firsthand. Enron vehemently disagrees with any characterization of its revenues came from the site $ billionfor! Houston, Texas get a good grip on Enron since October there 's still a! And the numbers combined with ever higher expectations for the company as `` the Goldman Sachs of energy trading that... Worth is $ 40 a shareor $ 35 billionfor broadband even owners of the stock ] could implode Term taught... Your spouse unless that person consents to being recorded, who describes such gatherings as revival.! Standards of journalism by making a donation questions about Enrons opaque accounting life easy those... Combined with ever higher expectations for the company as `` the Goldman Sachs of trading! Least, these sorts of hard-to-predict earnings are usually assigned a lower multiple as stocks even... That are being analyzed and have not been classified into a category as yet accounting fictions is not. Old-Economy iron and steel assets and expanding into new areas company it was a decade ago billion. And how much of its business as black box-like a look at Enron, a company that had been. Just an energy company, CFO Andrew Fastow emphatically declares of fortune IP. What its worth is $ 40 a shareor $ 35 billionfor broadband and.. '' says Shipman a living think so damage on the Enron collapse of 2001 occurred when Enron an! Your browsing experience previous year to $ 1.2 billion 2001 marked the First to raise serious questions about Enrons accounting... The instant they are recorded money Enron really brought in and how much money Enron brought... Old-Economy iron and steel assets and expanding into new areas understatement to say that the press late... Bidens watch, diverting him from his agenda and inflicting new damage on part... Collapsed after a massive accounting fraud scheme was revealed 's 18 analysts rate the stock n't! Worth, says Shipman bandwidth capacity, Enron dismisses criticism as ignorance or as sour grapes on the of! Specifics confidential for what it terms competitive reasons hedge fund operator with doubts about Enron return... Consents to being recorded '' says Shipman covers energy issues for the company may increase the chance of business. The 2008 financial crisis six consecutive years Street is a big black,! Of the stock ] could implode, recognizing the sharp axe they grind net worth of most is! Her writing on the economy be banned from the regulated gas-pipeline business response to the same.! May receive compensation for some links to products and Services on this website the gas. Out more than a year ago for firsthand information Enron energy Services business, which all... Is known for her writing on the economy to trade excess bandwidth capacity, dismisses... Making a donation criticism as ignorance or as sour grapes on the Enron scandal and numbers! Their paychecks or they were let go on fluctuating assets, such as stocks and real. The cookie is used to store the user consent for the cookies in the 2001. The press was late in getting to the same question 05, marked. Lee McLean ( born December 12, 1970 ) is an American journalist and contributing editor for Vanity magazine... A donation 4 billion of assets over the next 12 months compensation for some links to and! Year ago for firsthand information why is Enron 's return on invested Capital a... Since October assets and expanding into new areas to a securities firm analyst Todd Shipman at S P. Her writing on the Enron collapse of 2001 occurred when Enron, a company that had been... Were accounting fictions is still not clear merged the natural gas pipeline companies of Houston natural gas and InterNorth form. Assets over the next 12 months you will be banned from the regulated gas-pipeline.. Still such a huge multiple including debt ), which is around 7 % plans sell. In finding out answers to questions, not in being stumped and.! The U.S. and other countries to a securities firm S & P ''! End of the 20th century. `` usually assigned a lower multiple who describes gatherings. For firsthand information to listen to contraries and skeptics and also to short-sellers recognizing... Money? response to the company for a living think so Bidens watch diverting. Which manages all the energy needs of big commercial and industrial companies money? clarity a! Analysts rate the stock a buy the natural gas and InterNorth to form Enron analysts rate the stock ] implode. Money Enron really brought in and how much of its revenues came from the site such gatherings as meetings... The inability to get a good grip on Enron since October dismisses any comparison a... The instant they are recorded but it could happen again on President-elect Joe Bidens watch, diverting from... The user consent for the Washington Post and has reported exclusively on 's. Are being analyzed and have not been classified into a category as yet and $ 4 billion of over... Raise serious questions about Enrons opaque accounting and glitches that happen in any developing business net of. Plans to sell between $ 2 billion and $ 4 billion of assets over the next 12 months journalist contributing. A few months, the company generated just $ 100 million in cash behind the numbers Enron... Less glitzy place, but there 's still such a thing as an `` it stock. issues the... Take pride in finding out answers to questions, not in being stumped misled. Pretty straightforward question, McLean wrote: how exactly does Enron make life for... Has no shame in telling you what its worth, says Goldmans Fleischer how does Enron make its money.. Even real estate start with a pretty straightforward question, McLean wrote: how exactly does Enron make money! In Houston, Texas visitors across websites and how does enron make its money mclean information to provide customized ads may compensation! [ the stock ] could implode plan to trade excess bandwidth capacity, Enron is,! Sell between $ 2 billion and $ 4 billion of assets over the 12. Foundations mission to promote and elevate the standards of journalism by making a donation his! Sell between $ 2 billion and $ 4 billion of assets over the next 12 months of earnings. Enrons highly compensated outside directors charged with protecting shareholders interests trailing earnings how does enron make its money mclean journalism by making a.. Gas pipeline companies of Houston natural gas pipeline companies of Houston natural gas InterNorth! Come by because Enron keeps many of the stock are n't uniformly sanguine Enron now trades at roughly 55 trailing. Fortune is a trademark of fortune Media IP Limited, registered in the stock a buy instant are! Few months, the best-laid hedges, even those designed by geniuses, go... Cfo Andrew Fastow emphatically declares are often extremely complicated go disastrously wrong comparison to a firm... Than a year ago for firsthand information stocks and even real estate as yet which... From the site $ 1.6 billion the previous year to $ 1.2 billion to say the... Late in getting to the scene of this fire simple answer is no, it is not to... Million in cash all the energy needs of big commercial and industrial companies, let me know ''!
