How did Enron grow despite major losses? In the early 1990s, the company implemented “mark-to-market” accounting for its outstanding gas contracts. Revenues, however, grew from $13.3 billion in 1996 to $100.8 billion in 2000. Enron also expanded into power plants, electricity, water supply, broadband communications and Internet video, many of which failed, costing billions. This trading increasingly drove profits and shaped corporate culture. Driven by former McKinsey consultant Jeffrey Skilling, the company was a market-maker and a leader in the contracting of buying, selling and delivering natural gas. It thrived on innovation, developing complex financial instruments for gas transactions. In February 2001, Fortune asked, “Is Enron Overpriced?” Eight months later, the company crumbled under revelations of bad investments, dubious accounting practices and abdication of corporate responsibility.Įnron was made possible by the deregulation of the natural gas industry in the late 1970s and early 1980s. OctoGoldman Sachs Analyst Report: Enron Corporation We are strongly reiterating our RL rating, and our conviction in the high and sustained growth prosp at ENE, even as we are cutting our 02 est. We see major catalysts in Q3 reporting and disclosure and more in coming months as credibility is partially restored. has worked against percep as mgmt has declined to be more specific in refuting even outrageous claims that have assumed a life of their own.
“Investors have virtually given up on ENE (down 63% ytd), & its prospects as a long list of extremely neg stories have swirled around about the co and its financial cond the co’s limited transparency to its sources of earnings, its cash flow and financials in gen. Steady Drumbeat of Corporate Scandals: Sarbanes-Oxley Act of 2002 Fall of Enron
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