Home Opinion Editorials WE CAN LEARN LESSON FROM ENRON'S PLUNGE
WE CAN LEARN LESSON FROM ENRON'S PLUNGE
Prior to the Sept. 11 attack, the stock market had been playing havoc with most investors stocks. From large financial investors to those of us who depend on someone else to manage our 401(k)s, we have been watching our amassed fortunes move about like a runaway roller coaster. Most Americans would be happy if their stock investments would just break even by the end of the year.
What a shock it would be to have happen to the rest of us what has taken place over the past few months to the employees of Enron and their subsidiaries. Last December, Enron stock was selling at $84.88 per share. When the stock closed on Nov. 15, Enron was selling at $9.48 per share. The majority of the damage was done after Oct. 16 this year when the stock plunged 70 percent. Like many enthusiastic groups of employees, Enron employees had their 401(k)s stocked full of company stock. Enron had been riding a tide of returns from the recent high electrical prices.
Enron had frozen the 401(k) accounts when it decided to switch the management company that handled the companys funds. During the lockdown and subsequent crash of the companys stock valuation, employees appear to have been left holding the bag. This included Portland General Electric employees who are still owned by Enron and lost 75 to 80 percent of their 401(k) values. One longtime PGE employee, aged 54, had his 401(k) value drop from more than $400,000 to between $65,000 and $70,000. Another employee saw his 401(k) dwindle from $348,000 to $36,000. Even top brass like PGEs chief executive officer, Peggy Fowler, saw her 35,000 shares in the company drop in value from $2.94 million to $350,000.
No one seems sympathetic, since it appears that everyone under the Enron umbrella will be left with very little when everything is said and done. The idea that company officials and loyalists would encourage the rank and file to put their investments in a company like Enron makes sense. Many other American corporations have encouraged employees to do the same, making countless thousands of them millionaires almost overnight. So what ever happened to being a wise investor and divesting your portfolio? There is nothing wrong with supporting the company you work for, but even top executives for major corporations are wise to spread their wealth and stock value around.
Enron is the only company to run into trouble and then end up making some apparently bad decisions, which cost the company almost everything. It appears the worst that will happen is many of Enron employees will have to forego early retirement and work a while longer. For the rest of us lets hope well learn to not put all our eggs in one basket.
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