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U1,L3 Enron - strain on the United States’ economy And...

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Enron Paper By: Aakash Sonkusare As the prices of Enron’s shares dropped, the investors kept on buying and holding more of Enron’s stocks. Many investors lost lots of money and trust in the corporations, as the CEO of Enron was advertising that the prices of the shares would surely increase, and this would have led to the investors losing confidence in the credibility of the financial statements and corporations. Because of not enough confidence, many investors would have stopped investing in the stock market, which would lead to the drop of prices of shares of other companies. Less buyers of Enron’s shares meant that its values would drop even more, and this led to the collapse of Enron. As Enron collapsed, many share prices of rival companies increased. Energy prices would have increased after Enron’s collapse; many became jobless as Enron has to declare bankruptcy. This put a major
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Unformatted text preview: strain on the United States’ economy. And this was all due to the fall in the value of Enron’s shares. As the prices of Enron's shares dropped, the CEO of Enron kept on saying that the prices will rise again, so the investors didn't sell their shares and as Enron declared bankruptcy, the investors suffered a major loss. Also, as Enron collapsed, many lost their jobs, and many lost their confidence in the credibility of the corporate. Investors probably doubted other companies of doing the same things as Enron, and this would have hurt all the companies' finances. Bibliography "Enron." Wikipedia . 4 Jul 2008 < http://en.wikipedia.org/wiki/Enron >. "Enron Scandal." Wikipedia . 4 Jul 2008 <http://en.wikipedia.org/wiki/Enron_scandal>. BBC, "Enron: Timeline ." BBC News . 4 Jul 2008 <http://news.bbc.co.uk/hi/english/static/in_depth/business/2002/enron/timeline/default.st m>....
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