What Went Wrong at Enron
Everyone's Guide to the Largest Bankruptcy in U.S. History
Chapter One
Ken Lay's Junk Bond
Ride Up on the
Natural Gas Express
A popular notion as to why Enron failed is that its leaders
didn't "stick to their knitting." When Ken Lay joined
Houston Natural Gas (the firm that would grow to become
Enron) as its chief executive officer (CEO) in 1984, the
company was an undistinguished utility whose business focused
on moving natural gas through the pipelines that were
its major assets, extending thousands of miles across the
United States. Over time, Enron became a trading giant that
would play a major role in every new market that came
along, luring away some of Wall Street's top talent in the
process. But in the late 1980s and early 1990s, the deregulating
natural gas and electricity markets would be its bread and
butter both as an energy company and as a Wall Street type
trading firm. While there can be no question that Enron's
hubris caused it to eventually overextend itself, entering markets
where it had no business being, its initial inclination to
expand was a sound business decision.
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