Enron - Natural Gas Industry Message Board

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Gold/Mining/Energy : Enron - Natural Gas Industry

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To: Glenn Petersen who wrote (260)	10/19/2001 1:48:36 PM
From: Glenn Petersen	Read Replies (2) of 1433

The Five Dumbest Things on Wall Street This Week By K.C. Swanson Staff Reporter 10/19/2001 06:59 AM EDT rd.yahoo.com*http://www.thestreet.com/_yahoo/markets/dumbest/10002661.html 5. Enron's Rabbit-From-a-Hat Style Analysts have complained for some time about Enron's (ENE:NYSE - news - commentary - research - analysis) rabbit-from-a-hat style accounting, with which the company produced results that wowed investors without making it quite clear where they came from. Now that its business has taken a sour turn, that tendency has gotten even more unsettling. To cap off its disappointing earnings results this week -- Enron posted a steep loss after taking a $1.01 billion charge -- the company let drop that its shareholder equity had decreased by $1.2 billion. In a conference call, CEO Kenneth Lay attributed the reduction in equity to the "removal of an obligation to issue a number of shares." According to a report in The Wall Street Journal, Enron repurchased 55 million shares issued through a series of transactions involving LJM Capital, a partnership that until recently was headed up by Enron's CFO. TSC's Peter Eavis has written that it appears Enron lent LJM money to buy Enron stock. Ironically, the company boasted in its earnings release this week that it had expanded reporting of its financial results, presumably to quiet its accounting critics. Enron's transactions have been so labyrinthine that it's hard to identify exactly if or how they were inappropriate. But the latest revelation, to say the least, does nothing to bolster the company's credibility. Enron, whose CEO resigned unexpectedly in August, had seen its stock fall 59% for the year leading up to its latest earnings release. Since then, it's dropped another 12.6%

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