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

356. On 8/28/01, Lay was interviewed by Bloomberg News which reported that Lay said:
[T]he company's earnings are still growing. Over the last four or five years, we've
been growing at a 20 percent compound annual rate as far as earnings per share.
Third quarter this year, our net income was up over - or, up 40 percent, and
earnings per share increase was about 32 percent, so the company's growing at a
very rapid rate. And certainly we believe that the current stock price is unduly
depressed.
357. On 8/28/01, Bank America issued a report on Enron, continuing to rate it a "Strong
Buy" and forecasting 01 and 02 EPS of $1.85 and $2.15. It also stated:
• Today's Wall Street Journal featured an article on ENE, which focused
largely on Ken Lay's (Chairman and CEO) efforts to help restore credibility
through fuller disclosure on its complicated business.
• In light of this positive article, we believe there are several reasons to be
bullish on the stock. Among them are:
• More detailed information should help alleviate a significant overhang.
• The re-emergence of Ken Lay is reassuring.
• The management team has a great deal of depth.
• We believe the stock is oversold. Given ENE's leadership role in the industry
and its reputation as an innovator, we believe it deserves a premium
valuation.
• Strong quarterly performance, demonstration that the growth rate is
sustainable and fuller disclosure should lead to improvement.
• We reiterate our Strong Buy rating.
358. On 8/29/01, a management level employee in Enron's EES operation sent a letter to
Enron's Board, which laid out and detailed the fraud that was going on in Enron's EES operations:
To the Board of Directors:
One can only surmise that the removal of Jeff Skilling was an action taken by
the board to correct the wrong doings of the various management teams at Enron.
However, based on my experience at this company, I'm sure the board has only
scratched the surface of the impending problems that plague Enron at the moment.
(i.e., EES's ... hiding losses/SEC violations ... lack of product, etc.).
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