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Gold/Mining/Energy : Enron - Natural Gas Industry -- Ignore unavailable to you. Want to Upgrade?

To: Richard Strutz who wrote (190)	2/27/2000 3:56:00 PM
From: lee west	Read Replies (1) \| Respond to of 1433

For those that haven't heard: Enron (ENE) 65 9/16: Enron is forming another online business, one that could be a blockbuster. In this morning's Stock Brief, we introduced you to Enron, pointing out that its Enron Online operation was a corporate jewel whose potential value hasn't been recognized. The company's new EnronCredit.com service is a perfect example of what we're talking about. Enron announced on Wednesday that it is forming EnronCredit with the intention of providing "live credit prices [enabling] business-to-business customers to hedge credit exposure (ie: risk that counterparty to a deal can't pay) instantly via the Internet". D-Day for Enron's new venture in credit risk market-making is set for March 8th. It's no accident that Enron is getting into this business, it's an outgrowth of a service the company has been providing internally to its electricity traders. In the free-for-all that has been the trading market in electricity, Enron needed to be able to evaluate whether or not a counterparty to a trade would be able to make payment on delivery. With EnronCredit, Enron is simply going commercial with a service they've been providing internally, with unmatched success I might add. The timing is perfect. With trading markets in everything from lab supplies to steel breeding like bunnies on the Internet, the much vaunted "Netexchanges", the need to lay-off credit risk is going to explode. No one is better equipped to provide this service than Enron. Enron has been spending $70-100 mln a year on information systems to support its internal trading operations. This is a perfect example of how Enron is going to be leveraging those investments and applying to them wider commercial applications. By the way, Enron chairman Ken Lay told a PaineWebber conference a couple of weeks ago that its Enron Online energy trading operation has handled $8.5 billion in transactions since the service's "launch" in November. That makes them one of the biggest, if not the biggest, B2B e-commerce players. Enron is a story with incredible depth. It's like an onion, you peel away one layer and another, a fresher one magically appears. It's the corporate gift that keeps on giving.