Derivatives: Darth Vader's Revenge Message Board

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Non-Tech : Derivatives: Darth Vader's Revenge

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To: Henry Volquardsen who wrote (1075)	4/2/2002 2:36:12 AM
From: JBTFD	Read Replies (2) of 2794

Here is an excerpt from S&P's Nov report on ENE: "Overview - 12-NOV-01 Key Stock Statistics Although third quarter results from operations were in line with analyst expectations (including ours), issues that emerged during the company’s conference call had a dramatic negative impact on the stock price. First of all, ENE incurred a $1.1 billion charge related to impairment of certain assets and investments in unconsolidated businesses, its broadband business, and in related party transactions. In addition, it recorded a $1.2 billion charge to shareholders’ equity as a result of termination of certain related party transactions. These actions led the SEC to launch a formal investigation of ENE’s third-party dealings." Both of the above mentioned problems were derivatives related. The announcement of those problems caused the stock to go from the mid 30's to around 5, over a period of a month or so. It also resulted in downgrades on Enron's debt ratings. I do not buy at all your statement that ENE's problems had nothing to do with derivatives. Also, according to S&P Enron's 3rd Q revenue 2001 was $47 Billion.

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