I agree with you, PBull. But I am interested in the role that others played in this fiasco. For instance, yesterday morning the Wall Street Journal said that Enron had made an informal acceptance of an offer by Dynergy to lower the buyout amount. Was this a lie? And what part did Dynergy play in all this? They had everything to gain by seeing Enron's price crash. Have you seen the movie "Wall Street" lately? I have. And what role did Harvey Pitt, the head of the SEC, play in this? He launched an investigation into Enron's accounting, etc. . . but failed to launch an investigation into traders that might be manipulating the price. Whether intentional or merely a clueless move, it amounted to applying more selling pressure, which aided short-sellers in taking the stock down to nothing.
$84 to $0.48 in a single year. Have you considered those who have worked for the company for a number of years and were counting on their stock holdings for retirement? A $1,000,000 account a year ago is now worth only $5 grand. A hundred K is worth about 500 bucks. This is TRAGIC for retirement accounts. And now who pays the $4 billion in debt after the bankruptcy courts sell off Enron's assets to Dynergy?? for pennies on the dollar?
So now Dynergy is able to buy the Enron assets without that massive obligation of debt. . . a FAR better deal for them. . . . . as if they did not know this. These are not oil companies. They are more like brokerages. They trade commodities like oil and gas all day long as their primary business. And in that sense, they are not much different than Merrill Lynch or Morgan Stanley.
At some point, our Securities Exchange Commission should have stepped in and said, "enough is enough here. . . we need an accurate valuation. . . and will halt it until fair value is determined." And if the stock deserves to be $0.48, then what were the factors that took it to $84? Was the company lying about their finances or was the stock pumped up by their investment banker? Someone's head needs to roll.
In my opinion, this stock should have been halted long ago. Wall Street has needed a general house cleaning for many years. There are WAY too many criminals getting away with whatever they wish. But it would seem that nobody has the guts to rise up against the influence. And until that happens, we will continue to see crimes like Enron.
Rande Is |
