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CNN Saturday Morning News
How Enron Stock Fell From $90 a Share to 67 Cents
Aired January 12, 2002 - 11:05 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: The government has launched several investigations into the collapse of Enron. Authorities want to know whether the bankrupt energy company misled its investors and employees about its financial strength.
CNN's Allan Chernoff has more.
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ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): Confidence is everything in the world of business and finance. A year ago, Enron had it, a dominant force in the energy markets. But in a few short weeks, it was all lost, the simple reason that the Number seven company on Fortune's 500 list now sits in ruins in New York Bankruptcy Court.
Friday, control of Enron's former crown jewel, it's energy trading operation, was auctioned off to investment firm UBS Warber, the price to be revealed next week.
Enron had built investor confidence by using complex financial structures that hid millions of dollars in debt. When a few investment analysts questioned the partnerships, former President Jeff Skilling exuded confidence.
JEFF SKILLING, FORMER PRESIDENT, ENRON: Well, if you cut it down to the core, what we sell is we sell reliable delivery and predictable prices.
CHERNOFF: Skilling resigned in August citing personal reasons. Chief Executive Ken Lay claimed Enron would be just fine, back on October 16 when the company restated its finances, revealing huge losses.
KENNETH LAY, ENRON CHAIRMAN: We find that we can continue to perform at very strong rates, even in this somewhat slower economy that we experience right now.
CHERNOFF: Friday, Lay said the sale is a "key milestone for restructuring Enron and emerging from Chapter 11." Clearly, that is a long way off, as Enron's lead bankruptcy attorney admitted in court, telling the judge he was selling something that was dead, that we've tried to bring back to life. MARTIN BIENENSTOCK, ATTORNEY FOR ENRON: It means that the trading business will be restored. There will hopefully be lots of revenues and value to give back to creditors.
(on camera): At the peak of investor confidence, Enron stock traded for $90 a share, with a market value of $67 billion. On Friday, the New York Stock Exchange halted trading at Enron, pending details of the auction. The exchange is now considering delisting Enron because it no longer meets listing requirements, the last trade, 67 cents a share.
Allan Chernoff, CNN, New York.
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