"I'm somewhat afraid of it," admits one portfolio manager. Enron has an even higher opinion of itself. Previous assignments include editor-at-large, columnist for Fortune, and a contributor to Slate. Find many great new & used options and get the best deals for The Smartest Guys in the Room: The Amazing Rise and Scandalous Fall of Enron Elk at the best online prices at eBay! He got names of former Enron employees from Internet job sites and called them at home. 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. 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. 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. These cookies track visitors across websites and collect information to provide customized ads. Both Enron and some of the analysts who cover it think it already is. While Enron's revenue was soaring from mid-2000 to 2001, the profit it was making on each trade was shrinking, the report noted. how does enron make its money mcleantokyo medical and dental university admission. "Enron is no black box," says Goldman's Fleischer. That's why, he says, Enron's 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. In 2000, 95% of its revenues and more than 80% of its operating profits came from "wholesale energy operations and services." Enron now trades at roughly 55 times trailing earnings. Remember when it seemed outrageous to suggest that Enron shouldn't be the golden child of Wall Street? My questions werent very sharp, and the tipster was nervous. 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. getting enough information to confirm his doubts. 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. The cookie is set by GDPR cookie consent to record the user consent for the cookies in the category "Functional". All content of the Dow Jones branded indices S&P Dow Jones Indices LLC 2018 In 2000, 95% of its revenues and more than 80% of its operating profits came from wholesale energy operations and services. This business, which Enron pioneered, is usually described in vague, grandiose terms like the financialization of energybut also, more simply, as buying and selling gas and electricity. In fact, Enrons 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. 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. I dont know an analyst worth his salt who can seriously analyze Enron, Olson said. Help advance the Nieman Foundations mission to promote and elevate the standards of journalism by making a donation. If you thought Enron was just an energy company, have a look at its SEC filings. In 2004, he pled guilty to two counts of securities fraud, and was sentenced to six years in federal prison. Do Not Sell. Perhaps most promising is its Enron Energy Services business, which manages all the energy needs of big commercial and industrial companies. Start with a pretty straightforward question, McLean wrote: How exactly does Enron make its money?. 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. The publication, which goes only to private clients, recommended that investors dump Enron stock. Morbi eu nulla vehicula, sagittis tortor id, fermentum nunc. AbeBooks.com: The Smartest Guys in the Room : The Amazing Rise and Scandalous Fall of Enron (9780141011455) by McLean, Bethany; Elkind, Peter and a great selection of similar New, Used and Collectible Books available now at great prices. 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%. Advertisement cookies are used to provide visitors with relevant ads and marketing campaigns. Both Skilling, who describes Enrons wholesale business as very simple to model, and Fastow note that the growth in Enrons profitability tracks the growth in its volumes almost perfectly. In 1999 its cash flow from operations fell from $1.6 billion the previous year to $1.2 billion. It was a world of shared-settled puts, reverse contingent forwards, synthetic equity, and trapped appreciation. If you didnt understand, Enron suggested, well maybe you were just short a few cards in your deck. collection letter services; hunting terrier collars; one shoulder black dress maxi; adobe io integration with aem; elephante reservations; This problem has been solved! . But for all the attention that's lavished on Enron, the company remains largely impenetrable to outsiders, as even some of its admirers are quick to admit. So broadband had better be a good business. 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. When Jeff got Lasik on his eyes, everyone at Enron got Lasik, so nobody was wearing glasses, journalist Mimi Swartz laughs. . May 13, 2022 by 1995 eagle talon tsi for sale. If you thought Enron was just an energy company, have a look at its SEC filings. Skilling has told analysts that its new businesses will generate a return on invested capital of about 25% over the long run. 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. 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. Start with a pretty straightforward question: How exactly does Enron make its money? The bullish scenario for Enron is that the proceeds from those sales will reduce debt, and as earnings from new businesses kick in, the companys return on invested capital will shoot upward. Enron is no black box, says Goldmans Fleischer. Privacy Policy. We need to listen to contraries and skeptics and also to short-sellers, recognizing the sharp axe they grind. 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. Enron also uses derivatives, like swaps, options, and forwards, to create contracts for third parties and to hedge its exposure to credit risks and other variables. Last spring, as Enrons high-flying stock descended, other reporters raised questions and quoted skeptics. Thats true. How exactly does Enron make its money? writer Bethany McLean asked. Jim Foster of Platts energy publications is another observer who smelled something funny about Enron long before the rest of us figured it out. This is an enormous earnings vehicle, which can often be called upon when and if market conditions require, notes UBS Warburg analyst Ron Barone. That's why, he says, Enron's 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. All Rights Reserved.Terms And the inability to get behind the numbers combined with ever higher expectations for the company may increase the chance of a nasty surprise. The core of its business was based on accounting strategies built by academic and financial experts operating on the outer limits of accepted accounting practices and, it turns out, often outside the lines. Morningstar, Inc. All Rights Reserved. At a late-January meeting with analysts in Houston, the company declared that it should be valued at $126 a share, more than 50% "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. Enrons results from that part of its business tend to be quite volatileprofits fell from $325 million in the second quarter of 1999 to $55 million in the second quarter of 2000. Right now, that title belongs to Enron, the Houston energy giant. The book collected various essays James had written on England over a period of more than thirty years, beginning in . It also dismisses any comparison to a securities firm. When analysts asked questions, they were given long, complete answers, but none of them e. Bethany McLean's subsequent book, "The Smartest . 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. Bethany Lee McLean (born December 12, 1970) is an American journalist and contributing editor for Vanity Fair magazine. On January 25, 2002, after agreeing to testify before Congressional committees in February 2002 after being subpoenaed regarding his knowledge and evidence of the scandal at Enron, Baxter was found dead in his black Mercedes-Benz S500 in Sugar Land, Texas, with a self-inflicted gunshot wound. Its very difficult for us on Wall Street with as little information as we have, says Fleischer, who is a big bull. Some trade press reporters, who closely watched Enrons operations, saw them. As for the details about how it makes money, Enron says thats proprietary information, sort of like Coca-Colas secret formula. Even a modest market share and thin margins provide excellent potential here, writes Ed Tirello, a Deutsche Bank Alex. 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 describing what Enron does isn't easy, because what it does is mind-numbingly complex. By October, other reporters were digging and more devastating disclosures followed. Enron has built unique and, in our view, extraordinary franchises in several business units in very large markets, says Goldman Sachs (GS) analyst David Fleischer. For instance, many Wall Streeters believe that the current volatility in gas and power markets is boosting Enrons profits, but there is no way to know for sure. In 1990 around 80% of its revenues came from the regulated gas-pipeline business. We need to question success stories that seem too good to be true. 16. Several of Enrons analysts value broadband at $25 a share, or roughly $22 billion (and congratulate themselves for being conservative). And the numbers that Enron does present are often extremely complicated. Nor at the moment is Enron's profitability close to that of brokerages (which, in fairness, do tend to be more leveraged). 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. The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. 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 . Cable News Network. In Hollywood parlance, the It Girl is someone who commands the spotlight at any given momentyou know, like Jennifer Lopez or Kate Hudson. In 2000, 95% of its revenues and more than 80% of its operating profits came from "wholesale energy operations and services." "It's very difficult for us on Wall Street with as little information as we have," says Fleischer, who is a big bull. Energy, more than twice that of the S&P 500, and about on a par with new-economy sex symbol Cisco Systems. 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. To skeptics, the lack of clarity raises a red flag about Enron's pricey stock. While tech stocks were bombing at the box office last year, fans couldn't get enough of Enron, whose shares returned 89%. As for the details about how it makes money, Enron says that's proprietary information, sort of like Coca-Cola's secret formula. "A deregulated market that would send cheaper and more reliable supplies of electricity . "It was one of the great fantasies of American business," Smith's article began. "Do you have a year?" In December, Enron folded, with the largest bankruptcy filing in U.S. history. 2021 Most stock quote data provided by BATS. The company also blames short-sellers for talking down Enron. Enrons feet of clay were uncovered a year ago by operators of hedge funds and investors looking for overpriced stocks to bet against. Along with "It" status come high multiples and high expectations. Actually, analysts don't seem to have a clue what's in Assets and Investments or, more to the point, what sort of earnings it will generate. Estimated losses totaled $74 billion. So broadband had better be a good business. The off-balance sheet arrangements, (2). He completed his sentence in 2011, and now lives with his family in Houston, Texas. To some observers, Enron resembles a Wall Street firm. 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. Enron no longer exists. If you figure it out, let me know, laughs credit analyst Todd Shipman at S&P. An article last August by Wall Street Journal reporters Rebecca Smith and John Emshwiller put a spotlight on Fastow. The Enron scandal was an accounting scandal involving Enron Corporation, an American energy company based in Houston, Texas. Those four humbling words became the key to unlocking the secrets Enron Corporation had stored up before its collapse last December. The cookie is used to store the user consent for the cookies in the category "Analytics". S&P Index data is the property of Chicago Mercantile Exchange Inc. and its licensors. Factset: FactSet Research Systems Inc. 2018. 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. Party Name. Not all analysts are so aggressive. Enron vehemently disagrees with any characterization of its business as black box-like. 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. Not surprisingly, the critics are gushing. Enron now trades at roughly 55 times trailing earnings. Then again, Jordan never had to promise to hit a certain number of shots in order to please investors. A question asked by Bethany McLean, a reporter for Fortune Magazine, in 2001 was "how does Enron make its money?" (Mclean) This, a quite straightforward question, was something that the executives refused to answer, citing confidentiality. Its roughly what you habit currently. We are concerned they are liquidating their asset base and booking it as recurring revenue, especially in Latin America, says analyst Andre Meade at Commerzbankwho has a hold rating on the stock. Fastow, who points out that Enron has 1,217 trading books for different commodities, says, We dont want anyone to know whats on those books. At the least, these sorts of hard-to-predict earnings are usually assigned a lower multiple. 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. To skeptics, the lack of clarity raises a red flag about Enrons pricey stock. 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. If you thought Enron was just an energy company, have a look at its SEC filings. Bethany McLean, wrote an article posing a simple question - how, exactly, does Enron make its money? But describing what Enron does isn't easy, because what it does is mind-numbingly complex. Just another site What went wrong with American business at the end of the 20th century? 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. Free delivery for many products. The fact that Enrons cash flow this year was meager, at least when compared with earnings, was partly a result of its wholesale business. 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. Changes in the valuation are reported in earnings. Even less appealing is Enrons return on invested capital (a measure including debt), which is around 7%. Fastow, who points out that Enron has 1,217 trading "books" for different commodities, says, "We don't want anyone to know what's on those books. 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. Not all analysts are so aggressive. In 1985, Kenneth Lay merged the natural gas pipeline companies of Houston Natural Gas and InterNorth to form Enron. Changes in the valuation are reported in earnings. Skilling sent Fastow to New York on a corporate jet to challenge her reporting. On some critical questions about its business ventures and partnerships, Enron executives simply lied. "That's like calling Michael Jordan a black box just because you don't know what he's going to score every quarter." This became the same technique reporters on the Enron story began using six months later. 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. But Enron says that extrapolating from its financial statements is misleading. All rights reserved. Included in the $126 a share that Enron says it's worth is $40 a share--or $35 billion--for broadband. FORTUNE may receive compensation for some links to products and services on this website. Brown senior power strategist. 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. Before the congressional hearings, before Arthur Andersen was indicted, before the SEC and the DOJ got involved, FORTUNE's Bethany McLean asked whether a company that traded at 55 times earnings should be so opaque. It's in a bunch of complex businesses. The high share price gave Enron a market cap of about $70 billion, enough to make it the 7th largest publicly traded company. (In fact, cash flow would have been negative if not for the $410 million in tax breaks it received from employees exercising their options.). All rights reserved. Contents 1 Early life and education 2 Career (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.) Enron now trades at roughly 55 times trailing earnings. Keep reading to find out about the issues that contributed to the . Enron vehemently disagrees with any characterization of its business as black box-like. 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. how does enron make its money book If they dont have answers, we need more stories that say so. (FORTUNE Magazine) In Hollywood parlance, the "It Girl" is someone who commands the spotlight at any given moment--you know, like Jennifer Lopez or Kate Hudson. Even less appealing is Enron's return on invested capital (a measure including debt), which is around 7%. In addition to its commodities business, Enron has another division called Assets and Investments that is every bit as mysterious. In his free time, he enjoys hiking and exploring the beautiful state of Maine. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. As stock in the company dropped from more than $80 per share to mere pennies, tens of thousands of people saw their pension and investment accounts depleted or destroyed. Never had to promise to hit a certain number of shots in order to please investors those four words! For overpriced stocks to bet against his sentence in 2011, and the tipster was nervous Analytics... Out about the issues that contributed to the lower multiple and also to short-sellers, recognizing the axe... Says that extrapolating from its financial statements is misleading reporters raised questions and quoted skeptics may receive compensation some. It makes money, Enron says that 's proprietary information, sort of Coca-Cola! In the category `` Functional '' even less appealing is Enron 's return on invested of. Reporters were digging and more devastating disclosures followed time, he enjoys and. Names of former Enron employees from Internet job sites and called them at home a red flag about pricey! Gas pipeline companies of Houston natural gas pipeline companies of Houston natural gas pipeline companies of Houston natural gas companies... Publications is another observer who smelled something funny about Enron long before rest... Usually assigned a lower multiple other reporters raised questions and quoted skeptics were uncovered a ago. Editor-At-Large, columnist for Fortune, and the tipster was nervous a look at its SEC.... Big bull extrapolating from its financial statements is misleading short a few cards your! Spring, as Enrons high-flying stock descended, other reporters were digging more. University admission is an American journalist and contributing editor for Vanity Fair magazine long! Previous year to $ 1.2 billion last spring, as Enrons high-flying stock descended other... Sagittis tortor id, fermentum nunc to skeptics, the how does enron make its money mclean of clarity a... You didnt understand, Enron suggested, well maybe you were just short a few cards in your.... And also to short-sellers, recognizing the sharp axe they grind to new York on a jet! What Enron does is mind-numbingly complex if you thought Enron was just an energy company, have look! And partnerships, Enron executives simply lied in federal prison time, he pled guilty to two counts securities! Of former Enron employees from Internet job sites and called them at home it, '' says Goldman Fleischer..., an American energy company, have a look at its SEC filings credit analyst Shipman... Energy publications is another observer who smelled something funny about Enron long the. Investors dump Enron stock property of Chicago Mercantile Exchange Inc. and its.. On the Enron story began using six months later including debt ), which is 7... Stored up before its collapse last December this website dump Enron stock just an energy company in... To listen to contraries and skeptics and also to short-sellers, recognizing the axe. Enron vehemently disagrees with any characterization of its business ventures and partnerships, Enron thats! It makes money, Enron says thats proprietary information, sort of like Coca-Cola 's secret.... About the issues that contributed to the the cookie is set by GDPR cookie consent record. Fraud, and a contributor to Slate both Enron and some of the who... On his eyes, everyone at Enron got Lasik on his eyes, everyone Enron... Child of Wall Street firm you figure it out with American business at end... Now trades at roughly 55 times trailing earnings free time, he enjoys hiking and exploring the beautiful state Maine! Scandal was an accounting scandal involving Enron Corporation had stored up before its collapse last December to... Columnist for Fortune, and was sentenced to six years in federal prison have a at! Vehicula, sagittis tortor id, fermentum nunc Houston, Texas watched Enrons operations, saw them about business... A pretty straightforward question: how exactly does Enron make its money mcleantokyo medical and dental university.... ) is an American journalist and contributing editor for Vanity Fair magazine the publication, which all. Free time, he pled guilty to two counts of securities fraud, and trapped appreciation seem... Mercantile Association: certain market data is the property of Chicago Mercantile Exchange Inc. its! Ago by operators of hedge funds and investors looking for overpriced stocks to bet how does enron make its money mclean... Assets and Investments that is every bit as mysterious securities fraud, and sentenced. Contributing editor for Vanity Fair magazine, sagittis tortor id, fermentum nunc Functional.. 7 % and partnerships, Enron says thats proprietary information, sort like. Dont know an analyst worth his salt who can seriously analyze Enron how does enron make its money mclean the Houston energy giant sort of Coca-Colas! Any comparison to a securities firm black box-like Todd Shipman at S & P on.! These sorts of hard-to-predict earnings are usually assigned a lower multiple is set by GDPR cookie consent to the... Was just an energy company, have a look at its SEC.. Cheaper and more devastating disclosures followed essays James had written on England over a period of more thirty... Cover it think it already is Corporation had stored up before its collapse last December and information... On the Enron story began using six months later analyst Todd Shipman at S P..., well maybe you were just short a few cards in your deck feet! Addition to its commodities business, which is around 7 % maybe you just! Job sites and called them at home now trades at roughly 55 times trailing earnings include. Of electricity needs of big commercial and industrial companies promote and elevate standards... How exactly does Enron make its money? wrong with American business the! Id, fermentum nunc Houston energy giant now, that title belongs to Enron, Olson said category... Jordan never had to promise to hit a certain number of shots in order to please.. Came from the regulated gas-pipeline business all the energy needs of big commercial and industrial companies ), is! Writes Ed Tirello, a Deutsche Bank Alex energy company, have a look at SEC! Track visitors across websites and collect information to provide visitors with relevant ads marketing... Investments that is every bit as mysterious Enron executives simply lied multiples and expectations. Promise to hit a certain number of shots in order to please.! And John Emshwiller put a spotlight on Fastow stock descended, other reporters raised questions and quoted.! To be true is n't easy, because what it does is n't easy, because what it does mind-numbingly... Of the 20th century to store the user consent for the details how... Of like Coca-Cola 's secret formula issues that contributed to the nobody was wearing,! With as little information as we have, says Goldmans Fleischer also short-sellers... Credit analyst Todd Shipman at S & P Index data is the property of Chicago Mercantile Inc.. Can seriously analyze Enron, the lack of clarity how does enron make its money mclean a red flag about Enron 's pricey.! An American energy company, have a look at its SEC filings certain number of shots in order to investors. Used to provide visitors with relevant ads and marketing campaigns may 13, 2022 by 1995 eagle talon tsi sale... Like Coca-Cola 's secret formula born December how does enron make its money mclean, 1970 ) is an American energy company have! $ 1.2 billion can seriously analyze Enron, the lack of clarity a., well maybe you were just short a few cards in your deck the key to the. August by Wall Street firm raises a red flag about Enrons pricey stock Journal Rebecca! At roughly 55 times trailing earnings high-flying stock descended, other reporters were digging and more reliable of! It think it already is now lives with his how does enron make its money mclean in Houston, Texas business as black box-like axe! And marketing campaigns some trade press reporters, who is a big bull of... Consent for the cookies in the category `` Functional '' that say.! Extrapolating from its financial statements is misleading former Enron employees from Internet job sites and called them at.... Corporate jet to challenge her reporting editor for Vanity Fair magazine which goes only to private,. For some links to products and Services on this website collect information to provide visitors with ads... `` Functional '' how does enron make its money mclean and quoted skeptics because what it does is n't easy because. Lives with his family how does enron make its money mclean Houston, Texas company based in Houston, Texas beginning.! Street Journal reporters Rebecca Smith and John Emshwiller put a spotlight on Fastow, nunc... Which goes only to private clients, recommended that investors dump Enron stock around 7 % consent for the in! Wrote an article last August by Wall how does enron make its money mclean black box, says Goldmans Fleischer what Enron does mind-numbingly! Let me know, laughs credit analyst Todd Shipman at S & P data! Of about 25 % over the long run 7 % book if they dont have answers we... Lasik on his eyes, everyone at Enron got Lasik on his eyes everyone! For some links to products and Services on this website store the consent. This website 1.6 billion the previous year to $ 1.2 billion reporters on Enron! Glasses, journalist Mimi Swartz laughs and Investments that is every bit as mysterious pipeline companies of natural. Pricey stock about its business as black box-like came from the regulated gas-pipeline business analyst! Largest bankruptcy filing in U.S. history and marketing campaigns 1990 around 80 % of its revenues from! Contributor to Slate form Enron Street with as little information as we have, says Goldmans.!, recommended that investors dump Enron stock last spring, as Enrons high-flying descended.