Table: Skilling's Strategy: What Went Wrong?
THE BIG IDEA THE PROBLEM
Create an "asset light" company. Some partnerships required Enron to Skilling applied Enron's trading kick in stock if its rating and and risk-management skills to stock price fell below a certain power plants and other facilities point. Enron could be left holding owned by outsiders. To maintain the bag on about $4 billion in a high credit rating and raise debt. With its stock and asset capital, Enron moved many of its values falling, Enron was vulner- own assets off the balance sheet able. And when things started to into complex partnerships. unravel, its murky finances spooked investors and lenders.
Expand Enron's energy trading Enron tried to do too much, too expertise into a vast array of fast, with little or no return. new commodities to sustain It invested $1.2 billion in fiber- earnings growth. Skilling en- optic capacity and trading facili- visioned taking on markets ties, but the broadband market ranging from paper goods to crashed. And it was never able to metals to broadband capacity. show that it could generate the profits it got from energy trading in markets such as metals.