at [email protected] I believe this is the article=3D=3D=3D So why is Enron trading at such a huge multiple? Bethany McLean. Known for, “Is Enron Overpriced?” Spouse(s), Chris Wilford (m. , d) Sean M. Berkowitz(m. ). Children, 2. Bethany McLean (born December 12, ) is an American journalist who is a contributing first wrote about Enron with her article in the March 5, issue of Fortune entitled, “Is Enron Overpriced?”. Article profiles Bethany McLean, Fortune magazine financial writer who highlighted on its cover with the headline, ”Is Enron Overpriced?”.

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So they are part of the mysterious machinery that is an important component of most Americans lives, but you actually never think about it until things go wrong. In written reports, Morgan Stanley chalked up the decline to the poor performance of Enron’s “significant number of investments” in telecom stocks; Dain Rauscher Wessels blamed it on a lack of asset sales.

In its annual report the company wrote that “the use of financial instruments by Enron’s businesses may expose Enron to market and credit risks resulting from adverse changes in commodity and equity prices, interest rates, and foreign exchange rates.

Enron doc debuts just in time for trial of Lay, Skilling – Chicago Tribune

Of course everything could go swimmingly. Nor does Enron make life easy for those who measure the health of a business by its cash flow from operations. The fees are approaching a billion dollars. At the least, these sorts of hard-to-predict earnings are usually assigned a lower multiple. Best Buddies at the Zoo. Start with a pretty straightforward question: Views Read Edit View history.

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Indeed, Enron dismisses criticism as ignorance or as sour grapes on the part of analysts who failed to win its investment-banking business. Comparison with year-end prices; Price-earnings ratio; Location of headquarters. Follow the news that matters to you.

Fastow, who points out that Enron ovepriced 1, trading “books” for different commodities, says, “We don’t want anyone to know what’s on those books. Enron then receives a “servicing fee,” but Skilling says that all the risks for example, changes in the value of the assets and liabilities are then transferred to the buyer.

Not surprisingly, the critics are gushing. The problem, as we know from innumerable failed dot-coms, is that the y enormous market doesn’t always materialize on schedule. This page was last edited on 11 Novemberat For instance, many Wall Streeters believe that the current volatility in gas and power markets is boosting Enron’s profits, but there is no way to know for sure.

Even owners of the stock aren’t uniformly sanguine. In Septembershe published Shaky Ground: Morgan’s private bank, who despite his remark is an Enron fan.

In any ogerpriced, some analysts seem to like the fact that Enron has some discretion over the results it reports in this area. And the inability to get behind the numbers combined with ever higher expectations for the company may increase the chance of a nasty surprise. We don’t want to tell anyone where we’re making money.

Enron doc debuts just in time for trial of Lay, Skilling

The bullish scenario for Enron is that the proceeds from those sales will reduce debt, and as earnings from new enrin kick in, the company’s return on invested capital will shoot upward.

That’s good, because Enron will need plenty of cash to fund its new, high-cost initiatives: Mortgage Giants which examines the governance and financial situation of Fannie Mae and Freddie Mac seven years after the financial crisis. In order to facilitate its plan to trade excess bandwidth capacity, Enron is constructing its own network.

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And Enron isn’t leaving itself a lot of room for the normal wobbles and glitches that happen in any developing business. Considers whether the stocks of United States energy company Enron are overpriced, as of March 5, That’s why, he says, Enron’s cash flow will be up dramatically, while enrno will be “way down, way down” when the company publishes its full year-end results, which are due out soon. If you thought Enron was just an energy company, have a look at its SEC filings.

McLean joined Vanity Fair as a contributing editor in So broadband had better be a good business.

And unlike a trading firm, which thrives when prices are going wild, Enron says that volatility has no effect on its profits–other than to increase customers, who flock to the company in turbulent times. And the inability to get behind the numbers combined with ever higher ix for the company may increase the chance of a nasty surprise.

Fastow, who points out that Enron has 1, trading “books” for different commodities, says, “We don’t want anyone to know what’s on those books. In its annual overpricced the company wrote that “the use of financial instruments by Enron’s businesses may expose Enron to market and credit risks resulting from adverse changes in commodity and equity prices, interest rates, and foreign exchange rates.