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| Early 2000: Dot.com boom|
Enron invests in the dot.com boom but are its profits all they seem?
Enron began 2000 with a plan to move into broadband internet networks and trade bandwidth capacity as the dot.com economy prospered.
Enron's dynamic ideas, coupled with its stable old-economy energy background, appealed to investors and the share price soared.
It was one of the first amongst energy companies to begin trading through the internet, offering a free service that attracted a vast amount of custom.
But while Enron boasted about the value of products that it bought and sold online – a mind-boggling $880bn (£618bn) in just two years – the company remained silent about whether these trading operations were actually making any money.
At about this time, it is believed that Enron began to use sophisticated accounting techniques to keep its share price high, raise investment against it own assets and stock and maintain the impression of a highly successful company.
Enron could also legally remove losses from its books if it passed these “assets” to an independent partnership.
Equally, investment money flowing into Enron from new partnerships ended up on the books as profits, even though it was linked to specific ventures that were not yet up and running.
One of these partnership deals was to distribute Blockbuster videos by broadband connections. The plan fell through, but Enron had already posted some $110m venture capital cash as profit.
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