Word: enronizing
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...With the decline in stock prices over the past six months stopped, people began to go back to Enron for deals. "We were high-fiving ourselves," Watson recalls. "The one thing that could hurt us was another surprise. The infamous one more shoe. Well, the closet hit us on Monday, when they filed the Q-10 [with the SEC] and it contained surprises. They weren't enough to kill the deal, but the fact was they were a surprise. On Tuesday and Wednesday, the stock lost over 50 percent. On Tuesday we were in panic mode. We were scrambling...
...When Enron was relegated to junk bond status the next morning, he opted out. "If there was any hope of the merger, that put a nail in the coffin," he says. As part of the agreement, he exercised Dynegy's option to take Enron's 16,500-mile pipeline in return for its investment of $1.5 billion plus assumption of $950 million in debt on the Northern Natural Gas system. Watson told TIME that he is confident the deal was "very carefully crafted" to avoid any risk. "It is an entity immune from bankruptcy proceedings. I expect...
...Watson bristles at people who say he just wanted to get the pipeline all along, not the core business. While he admits no interest in Enron's commodity trading, Watson was keenly interested in the core businesses of energy marketing. "Remember Enron was a company that had set itself up as a market maker for all commodities around the world any place, any time. I have no interest in that and never did," says Watson. "Our strategy would have been to sell off all those commodities except the core gas and power businesses and keep all the pipelines. I would...
...said his first job was to turn the tide around for Enron's tattered credibility with investors. "This was about arresting a company that had eroded in value because of problems with confidence in their disclosures. I didn't believe those things about lack of integrity and leadership over at Enron. There's 20,000 people over there. We know them. We trade with them every day, we play with them every...
...Enron needed money from the bankers to buy back confidence, but the bankers couldn't cough up enough to satisfy Watson that the long-term problems - including $18 billion in debt coming due over the next couple of years - could be dealt with. "Business started going south quickly. Earnings were not coming in the door so now I have a moving target. Look at stock price Wednesday to Wednesday, it wasn't pretty...