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

Dollars Per Share
30
25
20
15
10
5
0
New Power Holdings, Inc.
Oct-00 Nov-00 Jan-01 Feb-01 Apr-01 May-01 Jul-01 Aug-01 Oct-01 Nov-01 Jan-02 Feb-02
This collapse in New Power's stock converted Enron's huge gain on its New Power equity holdings
into a huge loss early in 01 – a loss of about $250 million – which Enron, Vinson & Elkins and
Andersen agreed to conceal and did conceal until 10/01 – when Enron shocked the markets by
revealing a $1 billion write-off and $1 billion reduction in shareholders' equity
I. Dark Fiber Swaps
43. In late 9/01, as Enron stock was falling sharply, frequently piercing equity issuance
"trigger" prices, and Enron knew it was going to have to take large asset writedowns in connection
with its 3rdQ 01 results, Enron was desperate to find a way to limit the size of these writeoffs and
generate apparently healthy "operating" earnings. So, on Sunday, 9/30/01, Enron and Qwest (another
Andersen client), with the help of Andersen and Vinson & Elkins, arranged a "swap" of fiber optic
assets. This Qwest-Enron deal, one of the largest ever recorded, allowed Enron to avoid recording
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