Enron Press Release

enron.com ^ | 12/14/01

[christianswindler]

I really think that this entire matter is going to revolve around the reasons for which officers/managers/insiders were selling at $80 and $70 and $60 and $50. It is entirely possible that they were just good guessers, but if I were you, I wouldn't bet on that.

[Angelique]

If you read the press release carefully, notice the dip in stock price during that period, which was a result of top executives cashing in. The employees were not told the company was in trouble. Thus, many would choose to remain in the company matching plan.

Most know that one must diversify, but I saw an interview with an older employee who had been with Enron for many years. He discussed how Risk Management would always point to the advantage of the matching funds. However you cut it, the top executives will probably be culpable.

[roostercogburn]

Fine. But what did George W. Bush do?

[Endeavor]

The "system" is not "rigged." There are practical approaches to investing and anyone can learn them if he/she puts his/her mind to it. Check out "Investing For Dummies" -- a book I sure needed and learned from. I'm not saying you'll become Warren Buffet, but anyone can learn and apply smart investing principles.

No one claims the stock market is a sure thing. It isn't. But it's a whole lot better than false hopes like Social Security "lockboxes." Now there's a giant white lie if ever there was one.

[roostercogburn]

Again I ask, what did George W. Bush do ?

[Angelique]

I am sorry, but I do not understand your question.

[roostercogburn]

It is sarcasm. All of the ins and outs of the case. So much happening. But the media is playing it up as if Bush was so involved. That maybe, wink wink , he knew something. Just a joke.

[Endeavor]

One issue is that Enron "matching stock" could not be diversified - ie, sold and invested in other companies, unless the employee was 50 or older. So people that started with the company at an early age, and who had progressed up the food chain but were not yet 50 yrs old, had a lot of stock that they couldn't move. But I don't know if that is an uncommon practice. My retirement is in a state retirement system and I'd love to move it, but can't unless I leave my job. Only then can I roll it over into a better investment portfolio. So, I "diversify" by contributing to my IRA.

Rooster, there's no evidence that George W. Bush did anything wrong.

[StriperSniper]

had a lot of stock that they couldn't move.

had a lot of ("free") stock that they couldn't move.

All the Enron stock they could not move had a cost basis of $0 (zero). It was a company perk that Enron did not have to give them. The "immobile" stock cost them nothing. In fact they are still ahead on the deal, only a lot less.

[Angelique]

I never followed Enron stock so I couldn't comment whether it was in a "must sell" mode. You have a point, however, and that is that many employees totally vested in Enron may feel apprehensive about instructing the plan administrator to sell. More importantly, to sell would result in a 10% penalty by the IRS. Let's face it, Enron did not do right by its employees.

[Quicksilver]

The point of allowing the option to invest a small percentage of your FICA payroll taxes in very conservative plans is that it would easily and safely outperform no investment at all. Trust me, you won't have the option to invest in an Enron-like stock, it would be something more like broad-spectrum mutual funds.

[Endeavor]

I'm aware of that, but it is a standard perk and people do consider it when developing their investment portfolio.

[StriperSniper]

Very true, however all the sob stories about being wiped out are at worst only half Enron's fault (not that it doesn't hurt).

[Endeavor]

I know the name and track record of my investment portfolio manager and I keep tabs on it. I also ck on the companies the portfolio has major interests in, and am aware that these positions change.

As has been said here, Enron stock had fallen significantly from Jan '01 through October '01 when the retirement plan changed managers and moving money was restrained for 10 working days. People could have gotten out all but their matching Enron stock long before October and long before Enron went bust. However, that doesn't explain how Enron execs made off like bandits, and that is what the investigations will hopefully clarify.

[My Identity]

I believe that Enron should be explained/positioned/spun as another Clinton mess that blewup on GW's watch.
Apparently (and fortunately) GW had the good sense not to get caught in the mess.

MI