RISE OF ENRON

 In 1985, Kenneth Lay merged the natural gas

pipeline companies of Houston Natural Gas
and Internorth to form Enron.
 In 1990s, he initiated selling of electricity at
market prices.
 US legislation approval of deregulating the
sale of natural gas.
 Enron started selling at higher prices.
 Enron and others on the part of Enron
prevented the increased regulation.(price
volatility)
 In 1992 Enron become the largest seller in
North America.
 Trading of gas earned $122 million, the second
largest contributor to company’s net income.
 The November 1999, Creation of EnronOnline.
 For further growth, Enron pursued a
diversification strategy.
 Company owned gas pipelines,
electricity plants, pulp and paper plants,
water plants, and broadband services
across the globe.
 This included setting up plants in
developing countries.
 Enron stock increased from 1990s until the
end of 1998 by 311%.
 Stock increased by 56% in 1999.
 87% in 2000.
 By December 31, 2000 Enron stock was
priced at $83.13 and its market
capitalization exceeded $60 billion,70
times earning and six times book value.
 Enron was rated the most
innovative large company in
America in FORTUNE’S most
Admired Companies survey.