Thanks for having the call yesterday. I am a believer in Enron and we are
buying your debt.
Here's short feedback on the call. I give the call a B-/C+ grade. If you
want a good example of a company call listen to the tougher calls So Cal Ed
had for investors. They talked with investors twice weekly for months.
There is an honestness and openness about the calls that worked to keep
The angry exchange with the short seller was a blunder. No matter what the
question, no matter how stupid or obnoxious, the Enron answer should always
be empathetic and pointedly factual. Yes, you will have to open the kimono
more than Enron ever has to restore confidence.
ENE has become more a financial institution, and less an energy company
with hard assets. You are in a confidence game pure and simple. Any
attempt at keeping things close to the vest will backfire and exacerbate
the current crisis. If you want to see disclosure in financials, look at
ENE is having an encounter session with the entire investment community.
This is not a time to be aggressive and smart. It is a time to be open,
honest and self-effacing.
Third party confirmation will go a long way in restoring confidence which
means 1) Moody's maintains their rating or limits the change to a one-notch
downgrade (bond rating) with stable outlook restored (the Moody's analyst
is pissed you surprised with the write-off), 2) the SEC gives ENE a fairly
clean report (no self-dealing found) on their transactions with private
equity partnerships, 3) no more large surprise write-offs, 4) outside
auditors continue with unqualified audit reports, 5) operating earnings
targets are met for this year and next, and 6)fuller disclosure is made in
Of course, if any fraud or malfeasance is found, you guys and ENE are
I have my ass on the line because I believe in ENE. We have made
investments. ENE is in the shitter because of ENE's past communication and
behavior mistakes. Be humble, be smart, and change.
P.S. You state there is a Chinese wall between LJM and ENE. Why in the
world then would you have the same guy, Fastow, play key controlling roles
in both organizations? If you want to pay him, pay him. Keep it simple.
I am glad Skilling is gone. I wouldn't touch your company's debt while he
was there. I hated him and his attitude?.and my past exposure to him was
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