06 March, 2021

The Decline And Fall

Enron had no choice but agree to what seems to be a shotgun marriage with a rival, Dynegy, a fourth its size.

The Decline And Fall
Lay: time to play dead? Enron, the most admired company in the US six years in a row, has been consigned to the dustbin of history and business school case studies. Once the darling of Wall Street for its aggressive no-holds-barred growth, its stock was languishing at historical lows of $7.21 last week, a steep fall of 90 per cent from its peak last October, representing a notional loss of $80 billion. In the last six weeks alone, its stock plunged by over 400 per cent.

Kenneth Lay, the politically-connected chairman who counts on the United States' First as well as Second Families (Vice-President Dick Cheney) as close friends, and the acknowledged power behind 'deregulation', has faced a nightmare over the last three weeks. Following a series of stories first published in The Wall Street Journal and The New York Times, Enron's stock went into a tailspin and it never recovered. The straw—albeit a heavy one—that broke the camel's back was a $1.01 billion charge on its pro-forma statement of...

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