HOUSTON -- The slick financing that helped turn Enron Corp. into a mighty power-brokering dynamo became its Achilles' heel, leaving the energy trader teetering toward bankruptcy after a smaller rival abandoned plans to buy it.
Enron's swagger was bold when shares of the nation's largest buyer and seller of natural gas traded at about $85 per share a year ago. That swagger became a limp Wednesday when shares melted down to less than a dollar.
''I don't think that you see such a well-thought of company falling down this quickly,'' Robert Christmas, a bankruptcy lawyer with Nixon Peabody LLC in New York, said of Enron's free fall over the last few weeks. ''I can't think of one in recent history where it was this fast.''
The collapse made bankruptcy seem inevitable for a company that just months ago was the country's seventh biggest in revenue -- but crumbled after revealing questionable partnerships and admitting it overstated profits for four years.
In quick succession Wednesday, two rating agencies dropped Enron's credit rating to junk status, forcing it to pay billions of dollars of debt it probably can't afford. Dynegy Inc. immediately backed out of an $8.4 billion acquisition plan after several days of efforts to renegotiate the deal.
Investors unloaded 339 million shares on the New York Stock Exchange -- a record for one day -- and sent Enron stock down 85 percent to close at 61 cents.
The decline continued on Thursday as Enron shares fell 31.2 percent, or 19 cents a share, to 42 cents by midafternoon in heavy trading on the New York Stock Exchange.
Enron also said Thursday it was evaluating whether previously declared dividends will be paid on the corporation's common and preferred stock.
Enron was valued at $80 billion little more than a year ago and in 1999 the company agreed to spend $100 million over 30 years to put its name on Houston's major league ballpark. By Wednesday evening, the company was worth about $500 million -- and one Enron share was worth less than one-sixth the price of a $4 hot dog at Enron Field.
Enron also wielded political clout. The company and its employees were the largest single contributors to President Bush's Texas and national campaigns last year.
But even the company's political connections couldn't stop the slide, and analysts said Enron has no other knights in shining armor.
Enron's money-losing broadband unit and power operations in India and Brazil are up for sale. Its inability to convince investors or energy traders to stick with it has left Enron without the outward confidence the company once so boldly displayed.
''I'm not sure they have any other alternatives (to bankruptcy), unless banks are willing to siphon more money into a black hole,'' said Prudential Securities analyst Carol Coale. ''Investors will not buy it.''
The credit rating downgrades by Standard & Poor's and Moody's Investors Service made $3.9 billion of Enron debt due immediately. As much as $16 billion in other debt due next year may have to be paid sooner.
Analysts blamed the company's fall on a combination of arrogance and a penchant for secrecy.
''They didn't explain things,'' said Morgan Stanley Dean Witter analyst Jim McAuliffe. ''They are very cocky and self-assured.''
Enron, which earned $979 million on $100.8 billion in revenue in 2000, last month revealed that partnerships run by its executives had allowed the company to keep about $500 million in debt off its books and let the executives profit from the arrangements. The Securities and Exchange Commission is investigating.
The company ousted its chief financial officer, Andrew Fastow, in October, and several weeks ago restated its earnings back to 1997 -- eliminating more than $580 million in reported income in that time span.
Enron tried to restore investor confidence by promising to sell its money-losing businesses to shore up its once-profitable trading business, but investors continued dumping more and more shares.
McAuliffe said that when the company's stock started to slip, he said, Enron executives should have clearly explained what was happening and actively recruited investors.
Instead, the slide continued, prompting Dynegy invoke an escape clause in the merger agreement to protect its interests.
''Sometimes, a company's best deals are the very ones it did not do,'' Dynegy chairman and chief executive Chuck Watson said in a conference call.
Dynegy stopped trading with Enron, but emphasized that the dissolution of the deal does not reflect a failure of the energy trading business.
Enron suspended payment of some debt and shut down its online trading operation Wednesday. Executives were ''evaluating and exploring other options to protect our core energy businesses,'' said Kenneth L. Lay, the company's chairman and chief executive.
Enron also said it is reviewing Dynegy's decision to exercise the option and analysts are anticipating a battle over Enron's assets in bankruptcy court.
Dazed workers trickled out of Enron's downtown Houston headquarters Wednesday afternoon, across the street from the company's new $200 million, 40-story glass tower, saying they couldn't predict Enron's future -- or their own.
''I don't know that there is a landing soft,'' said Enron employee David Picone. ''Top to bottom this is a hard landing for everybody.''
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