most Enron employees were unable to sell their shares held in the 401k plan for several months, becuase all assets were "frozen" while the plan changed administrators.
the freeze ran from 10/29 to 11/12, and it ended earlier than enron's estimated ending date of 11/20, and all employees had multiple prior notices of the freeze
however, most of the enron shares in the plan were already "frozen", because no company contributed shares could be sold by the plan under any circumstances for those not yet over age 50
the administrative changeover freeze affected only two types of enron shares held in the plan, 1) those purchased with employee contributions, and 2) those enron-contributed shares held by those over age 50
the overall plan holdings of enron shares were 62% of assets, and assuming that half of assets were company matching contributions, that leaves 12% purchased with employee contributions, or about 25% of the half of the total fund resulting from employee contributions
(and the employees held a lot of the stock in the plan), that might help to stabilize the stock price
but, even if every one of them sold every single share they could, it would have been but a drop in the enron volume bucket
even assuming all 20,000 employees were in the plan with income of 50k per year each for each of 10 years, each contributing the max to get enron's 3% max match, and an average purchase price of 30, the whole pile contributed by enron would have been only 10 million shares (50% of plan assets), of which probably less than half would be owned by those over 50 (making less than 5 million salable), and the employee purchased shares (12% of plan assets) that could be sold would be about 2.5 million shares
considering that not all employees were in the plan, they probably didn't average 50k, they all certainly didn't contribute the max and the average length of employment was probably a lot less than 10 years, the total shares in the plan that could actually be sold in the absence of a freeze could easily be a lot less than 7.5 mill, perhaps a lot less
in any case, whatever the total was is insignificant when you consider that enron's daily volume during the freeze period was as high as 100 mill and 30-40 mill was routine
but, even more importantly, there is no particular reason to believe that any of them would have sold a single share during the freeze even if they could have, as they had already demonstrated their willingness to hold while riding it down from 90 to 15 during the previous 12 months
not to mention the fact that any restricted under-50 employee could have opened a private brokerage account at any time and sold short the same number (or more, if desired) of restricted company-contributed enron shares held in their 401k
which would result in a net position of zero enron shares, but might trigger tax penalties because of constructive receipt of tax-deferred 401k gains for non-exempt reasons, but a relatively minor tax penalty beats riding it all the way down to under a buck
now, as to the shenanigans in general, i posted this earlier on another thread -
there is some interesting stuff in enron's 2000 10k filing
buried deep in this giant filing is a brief mention of 67 million in fake profit, one of the transactions that caused the unraveling -
"In 2000, Enron sold a portion of its dark fiber inventory to the Related Party in exchange for $30 million cash and a $70 million note receivable that was subsequently repaid. Enron recognized gross margin of $67 million on the sale"
"dark", of course, means unused and unsalable except at a huge loss, and instead of carrying 33 mill of nearly worthless fiber on their books, they seem to have arranged to fund the "related party" with 32.4 mill (that amout is disclosed in one of their 8k "special event" filings in november)
of which they later got back 30 mill in the "sale" along with a 70 mill note of highly dubious value, resulting in a neat 67 mill "profit" to aid them in puffing up earnings and fooling analysts and shareholders
turns out the 8k also discloses that the 70 mill note was "paid", except that what they called "payment" actually left enron with 61 mill of residual liability, and except that it was "paid" by another "special" entity set up by enron to buy the "dark" fiber from the first "related party" set up by enron to buy the "dark" fiber in the first "sale"
which makes the entire transaction reminiscent of some arkansas real estate flipping performed in the 80s by a certain senator from new york, they certainly seem to share the same tendency to abuse the meaning of simple english words and to be equally good at obfuscation
also in the 10k are almost 2,000 lines of text enumerating their many hundreds of subsidiaries and partnerships, a ton of which are cayman or turks & caicos entities, each renowned for both bank secrecy and being a tax haven
the staggering complexity of enron's organization is beyond astounding, it's absolutely mind-boggling, nobody in their right mind conducting business honestly sets up eight internal levels of subsidiary entities
as usual, unnecessary complexity is a good indicia of the existence of some level of bad faith, if not outright fraud
it's completely incomprehensible how any so-called analyst who has done even a cursory reading of the 2000 10k (or any previous year's 10k) could either claim to understand how they operated, or recommend purchasing the stock, as the 10k is clear as mud
BTW, from what I've read, and it's not definitive, the freeze in the plan was several months.....the few days you referenced refer only to making ongoing contributions.....not to switching assets withinin the plan....It was, I believe a several month hiatus...but, the truth will come out......I'll admit, my supposition is based mainly on the smell test..it doesn't smell right that Enron would decide to reconfigure the plan at just that time.....Occam's razor, ya know......