🚀 go-pugleaf

"Charlie Wilkes"
> No, that's not a reasonable assessment at all.  There was a broad
> pattern of negligence and financial misrepresentation that the Street
> didn't know about.
> Charlie

Wallsteet looked primarily at growth ....Enron had many years of phenomenal
sales growth via energy trades that actually did little to actually increase
the bottom line. Since 90% of  gross sales were these energy trades they
built a "paper tiger" company that was built on fluff and image (even worse
some of these trades were simply back and forth transactions with other
energy traders). The basic flaw being you sell a energy contract worth a
million, keep a thousand but gross sales reflect the million.....get enough
these passing through your doors ($90billion) and you look like a major
player. This opens the door to huge stock gains, bank loans and various
financing but the net long term could never support the overhead. The huge
sales created the image of a company way larger than a more appropriate
bookeeping method of only counting commisons but nonetheless this method was
considered legal. Once the investors and bankers lose faith in your empire
you collapse... The one area where illegal acts will come to play will be
Enron's efforts to plump up the profits enough to get by investor scrutiny
especially after the empire began to collapse. The investor professionals
and public were more than fools to embrace a largely paper company that did
not add real value to these transactions. The Clinton energy deregulation of
the 90's allowed and created this economic monster....duing the heady 90's
the Enron's were being lionized as the company of the future....more fluff.
Soggy