IS ENRON OVERPRICED ARTICLE PDF

IS ENRON OVERPRICED ARTICLE PDF

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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In Enron’s view, its core business–where the company says it makes most of its money–is delivering a physical commodity, something a Goldman Sachs doesn’t do. Actually, analysts don’t seem to have atticle clue what’s in Assets and Investments or, more to the point, what sort of earnings it will generate. But Enron has been steadily selling off its old-economy iron and steel assets and expanding into new areas. Enron has an even higher opinion of itself. Start with a pretty straightforward question: To some observers, Enron resembles a Wall Street firm.

FORTUNE archive: Is Enron Overpriced? – Jan. 19,

It’s better to know that than not know, right? Along with broadband, Enron has ambitious plans to create big businesses trading a huge number of other commodities, from pulp and paper to data storage to advertising time and space. Changes in the valuation are reported in earnings. Nor at the moment is Enron’s profitability close to that of brokerages which, in fairness, do tend to be more leveraged.

Sex Education in Schools. With the exception of a handful of people gambling with billions of dollars of other people’s money, even armchair investors can learn things from Enron’s gargantuan failure, McLean says.

In other projects Wikimedia Ernon. Archived from the original on October 18, Enron vehemently disagrees with any characterization of its business as black box-like.

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Berkowitz is the former Director of the Enron Task Force; they met through their mutual connection to that case. But Enron says that extrapolating from its financial statements is misleading.

It also has McLean talking once again about Enron, the story that follows her everywhere, but she doesn’t seem to mind. As for the details about how it makes money, Enron says that’s proprietary information, sort aritcle like Coca-Cola’s secret formula.

How exactly does Enron make its money? These two stories have still gone untold, but we knew we couldn’t finish our book with all of that ongoing, so we chose to finish our book with the day the company went bankrupt. Not everyone is so chipper. Without having js to each and every one of Enron’s contracts and its minute-by-minute activities, there isn’t any way to independently answer critical questions about the company.

The problem, as we know from innumerable failed dot-coms, is that the y enormous market doesn’t always materialize on schedule. Even owners of the si aren’t uniformly iverpriced. If you thought Enron was just an energy company, have a look at its SEC filings.

Perhaps most promising is its Enron Energy Services business, which manages all the energy needs of big commercial and industrial companies. Without having access to each and every one of Enron’s contracts and its minute-by-minute activities, there isn’t any way to independently answer critical questions about the company.

Along with “It” status come high multiples and high expectations. Winners and losers; Price change; Produce Price Index core rate; Puerto Rican Cement as the only local stock which increased in value during the week. Focuses on analysts’ valuation of several South African companies as of June 23, 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.

Top Stories 7 things to know before the bell. Comparison with year-end prices; Price-earnings ratio; Location of headquarters. 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. Along with broadband, Enron has ambitious plans to create big businesses trading a huge number of other commodities, from pulp and paper to data storage to advertising time and space.

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Even owners of the stock aren’t uniformly sanguine. There are other concerns: If you thought Enron was just an energy company, have a look at its SEC filings.

And as Long Term Capital taught us, the best-laid hedges, even those designed by geniuses, can go disastrously wrong.

Is Enron Overpriced?

That’s about the same rate of return you get on far less risky U. Morgan’s private bank, who despite his remark is an Enron fan. The second–and somewhat belated–U. Both Skilling, who describes Enron’s wholesale business as “very simple to model,” enro Fastow note that the growth in Enron’s profitability tracks the growth in its volumes almost perfectly.

Despite the continuing drama, a lot of Americans consider Enron old news.

Bethany McLean

The same is true for Enron’s competitors, but “wholesale operations” are usually a smaller part of their business, and they trade at far lower multiples. That’s why, he says, Enron’s cash flow will be up dramatically, while debt will be “way down, way down” when the company publishes its full year-end results, which are due out soon. Overview of the Gun Control Debate. Or, visit Popular Alerts for suggestions.

Bethany McLean born December 12, is an American journalist who is a contributing editor to Vanity Fair magazine, and known for her work on the Enron scandal and the financial iss.