Enron Corp. - University of California | Office of The President

CEO Jeff Skilling Resigns; A Negative But Not Deleterious; Reiterate Buy
* * *
• Former CEO Jeff Skilling resigned abruptly yesterday for personal reasons
....
• While were are quite surprised and disappointed about Mr. Skilling's decision
to leave the company, we believe that Enron has the deepest management
"bench" in our universe. In addition, we also feel confident that Enron's
transformation to an information and logistics company is well underway
and others ... will carry the torch to move Enron in its current strategic
direction.
• We reiterate our Buy on Enron, and believe that upcoming catalysts will
provide further clarity on Enron's earnings sustainability.
349. On 8/15/01, CIBC issued a report on Enron. It continued to rate Enron a "Buy" and
forecast 01 and 02 EPS of $1.80 and $2.15 for Enron. It also stated:
Leadership Change: The current President and CEO of Enron Corp., Jeff Skilling
announced his resignation effective today. The reason for his departure was cited as
"personal concerns" and not related to Enron's current or expected performance....
In discussing the leadership change in a conference call after yesterday's close, Ken
Lay and Jeff Skilling re-iterated their confidence in the Enron business model and
assured investors the management change was not related to financial or
operating performance.
350. Despite Enron's and its bankers' reassurances regarding the reason for Skilling's
resignation and that Enron's business was very strong and there were no undisclosed problems,
Enron's stock fell sharply from $43-13/64 on 8/14/01 prior to the Skilling announcement to $36-7/8
on 8/15/01.
351. On 8/16/01, executives Lay, Skilling and Fastow met with several of Enron's banks
to try to support Enron's stock.
352. On 8/17/01, JP Morgan issued a report on Enron. It continued to rate Enron "Buy"
and continued to forecast 01 and 02 EPS of $1.82 and $2.17 for Enron. It also stated:
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