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Enron: How they succeeded and how they failed On December 2, 2001 Enron announced the biggest bankruptcy ever in history. Stocks prices that were at around $80 per
do with the situation or issue that makes a difference. As in the above information, Enron failed because of his or hers leaders and Novo Nordisk succeeded because
recently. Huge Fortune 500 companies, such as Enron, WorldCom, Kmart, Xerox and Polaroid, have failed miserably. These are companies that were not supposed to collapse.
ethical and legal trust of thousands of Americans. Consequently one could argue that because they failed to do this that they were entirely responsible as far as
Enron, by most measures was not particularly profitable, but there was one area in which they succeeded like few others: executive compensation. Between 1996 and
Submitted by seaska8 on July 9, 2007
Category: Miscellaneous
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On December 2, 2001 Enron announced the biggest bankruptcy ever in history. Stocks prices that were at around $80 per share plummeted to under a dollar. An analogy that I have compared Enron to is an Olympic track coach who heard about a runner who had broken the World Record for the mile run by 45 seconds faster than everyone else. The coach would probably refuse to believe it. When Enron made equally unlikely pronouncements no one seemed to have asked not even one question or even think twice if the amount the company earned was even possible.
On October 16, Enron announced a $638 million loss for the third quarter, and Wall Street reduced the value of stockholders' equity by $1.2 billion. Enron also announced on November 8, that it had overstated earnings in annual reports for nearly five years by $586 million and that it was responsible for up to $3 billion in obligations to various partnerships. For example, J.P Morgan recently announced that they had $500 million in unsecured loans to Enron. This is just one company that has been affected by the collapse of Enron. Many are being blamed, and this is still under investigation (Taub).
Based on those falsified reports, investors and thousands of Enron employees decided to buy or hold the company's stock and options. Shortly after the discovery of the misrepresented profits, Enron's auditors at Arthur Anderson admitted that they had incorrectly approved the flawed profit and destroyed documents related to Enron, which is an accounting sin (www.about.com). It is apparent that they failed to disclose many of its lobbying expenses to congress last year as the energy trader headed towards this financial disaster.
Enron was the seventh largest company in the nation. They acted as the "middleman" in large natural gas and electricity deals. The way they define their business in one sentence is: "we make commodity markets so that we can deliver physical commodities to our customers...
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