"But despite the massive publicity, what exactly was at Enron's (nyse: ENE ) core remains rather mysterious.
Between 1999 and 2000, Enron's revenues grew from $40 billion to $101 billion.
It was on track to double revenues again this year. Enron didn't grow that fast by
building twice as many pipelines or power plants; no one can build such massive projects that fast.
The growth, it seems, came from its trading revenues.
Enron's annual report doesn't break down how much revenue it gained from various activities,
but it would appear that the vast majority of its burgeoning revenue stream--which is what fed
the share price gains that fabulously enriched Enron's insiders--was from trading.
This trading was largely unregulated, so its nature is also not widely understood.
But the idea that Enron's core business was producing and transporting power seems
as fanciful as anything else Enron ever said about its business."
Above excerpt is from, "Enron's Mysterious, Troubled Core "
Dan Ackman, Forbes.com, 12.14.01, 9:15 AM ET
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Karen, Enron's growth came from trading revenues, but since trading was largely unregulated ,
Enron insiders benefited from the increase in share price!
It's hard to keep up with all of this.
Thanks,
Mephisto |
