legendary trader
Chapter 848 849 Enron is over
Chapter 848 849 Enron is over
"Be more specific, what kind of affiliated company?"
At this moment, Chen Fan suddenly became interested in how Enron got money through affiliated companies.
"According to the report, Enron has two affiliated companies, the Marin II Trust and the Osprey Trust.
Enron raised 34 billion yuan through these two funds, but the newspaper's reporters and invited accountants confirmed after carefully reading the last few financial reports of Enron that neither of these two companies appeared in the list of affiliated companies , that is, their business activities are not reflected in the financial statements released by Enron.
They think that it is impossible for these two affiliated companies to carry out financing after the end of the third quarter. It is not so easy to raise 34 million yuan of funds. It must have started in the third quarter, so in the new financial report There should be relevant information, but unfortunately they did not see it. "
"Wait, Affiliate is a trust fund?"
Chen Fan suddenly interrupted Zhang Quan's words and asked.
"Thomas, Enron's chief financial officer, is in charge of these two trust funds, and they are raising funds for Enron. As for how to deal with the money, the report speculates that they probably want to absorb the money through targeted capital increase and share expansion. Because Enron simply had no other way of handling the bill."
Zhang Quan explained, but went on to say: "The report also analyzed Enron's third quarterly report. According to Enron's conference call on the third quarterly report, Enron's two huge one-time restructuring fees became the focus. That is to say, Enron claimed that it suffered a loss in the third quarter due to a restructuring fee of 10 billion yuan, but it actually concealed more losses.
The first restructuring fee includes 10 billion yuan of restructuring and loss charges for closing water plant business, broadband communication network and other real estate investment projects, but analysts also noted that Enron's operating costs in the third quarter were higher than those in the previous two quarters. But they were more than 2 million yuan lower.
Buy-side analysts speculate that Enron may include some of its normal operating expenses in a "one-time restructuring fee" to increase Enron's operating profit and make its reports look better.
The second reorganization fee is a reorganization fee of 12 billion yuan for the interruption of the financial contract with "a certain affiliated enterprise". Into the current income statement, but directly deducted from the balance sheet shareholders' equity, which means that the shareholders' net assets will decrease by 12 billion yuan. "
"That is to say, strictly speaking, in Enron's third quarter report, under normal circumstances, their loss is not more than 6 million yuan, but 18 billion yuan?"
Chen Fan frowned and asked, but before seeing the detailed information, it is really hard to say whether the loss of the buyout contract should be included in the current income statement or included in the previous year's profit and loss adjustment, but this is only for accounting. For those who read the report, this should be the understanding.
"Yes, I have already asked a professional accountant to read Enron's detailed financial report, but I haven't received a response yet."
Zhang Quan replied.
"Let's talk about the quarterly report first. When Enron said it would shut down the water business and some other projects, I also guessed that there would be losses. This report is to suspect that they included the company's operating expenses in this loss, right? "
Chen Fan said, but without waiting for Zhang Quan to answer, he said to himself: "There is also the 12 billion yuan. They think it belongs to the previous year's profit and loss. It is not reflected in the current income, but directly from the shareholders' equity. deducted?
This is cunning enough. If you don't read the financial report in detail, you may not find it. "
Chen Fan sighed at this moment, Enron really knows how to play.
"The most important thing is the matter of those two funds. They raised more than 30 billion yuan in the name of private placement of new shares by finding money privately. Now that the shares have not been issued, the money is used to repay the loan?"
"That's what it means. The establishment of these two funds should be specially prepared for raising funds."
Zhang Quan said.
"No, now where Enron's stock price has fallen, who the hell would believe them? If you pay for Enron's stock now, don't you encounter a fool?"
Chen Fan said suddenly, feeling that he couldn't explain it.
"According to reports, these two funds have been operating this matter for a long time. In the first half of the year, when the stock price was around 50 yuan, they had already started to operate."
Zhang Quan said: "According to undetermined sources, the website noticed this matter because some investors wanted to go back on their word and withdraw from the project, but found that the money had been embezzled, so they paid off the debt."
"That's it."
Chen Fan already understood Enron's way of making money. It should be that when the stock price trend had not yet collapsed, they secretly set up a trust fund to raise funds in order to target banks and other financial institutions that would no longer increase their financing quota. The method of additional issuance of Enron shares attracted investment.
At that time, Enron's stock price trend was not so-so. Although it had already weakened, obviously these Christians did not think that Enron's stock price would continue to fall, and it seemed that there was still a chance to pick up a bargain in the current decline, so they poured money into it.
But now that Enron's stock price is nearly collapsing, it's natural that they don't want to throw money into this bottomless pit, even if it's discounted according to the market price. Maybe that little discount will disappear after the stock price falls for two days.
Chen Fan felt that he probably understood what the news was, so he planned to hang up the phone. It was useless to continue thinking at this time. After the rice stock market opened at night, people would naturally vote with their feet.
At this moment, Chen Fan, who was about to hang up the phone, vaguely heard someone talking on the other end of the phone, and then heard Zhang Quan say over there: "Mr. Chen, wait a minute, I got some New thing."
It seemed that there was some new news from Zhang Quan, so Chen Fan had no choice but to wait and hear what new news Zhang Quan had.
But this time Chen Fan had been waiting for a long time. From time to time, he could still hear the voices of Zhang Quan and another person on the other end of the phone, but they were very vague, and he couldn't hear them clearly at all. He didn't know what they were talking about.
Chen Fan had no choice but to sit on the bed, not knowing when Zhang Quan would suddenly speak, so he could wait quietly.
After a long time, Chen Fan's patience was almost exhausted, and Zhang Quan's high-pitched voice suddenly came out from the phone's microphone.
"Chen Fan, I know how Enron operates."
Surprised by Zhang Quan, Chen Fan wanted to get angry a little bit, "Speak up, I'm listening."
"Enron is indeed concealing its debts. This is the article on the front page of the Wall Street Journal tomorrow, which details the previous loss of 12 billion yuan. It should be the big news that their people tracked down.
Enron was previously developed by Andrew Fastow, the company's financial director at the time. After the U.S. technology stock bubble burst last year, because they were worried about the loss of the broadband business invested by the company, they created LJM Asset Management Company and issued three phases of trust funds. They are LJM No. 12, No. [-] and No. [-] respectively. The loss of [-] billion yuan this time is probably due to LJM Company.
According to the report, the non-disclosure agreement signed by LJM No. [-] and Enron covers Enron's broadband business, which is equivalent to a bet. The conditions are also very interesting. If the assets of Enron's broadband business appreciate, LJM No. [-] will share this part of the premium , if it is depreciation, it is LJM No. [-] who bears the loss.
The 12 billion yuan raised by LJM No. 12 will go into the company, but if LJM No. [-] encounters a liquidation crisis, Enron guarantees to pay [-] billion yuan in cash or equivalent stocks, basically Enron guarantees the project. "
"I see, the other two trusts are also similar gambling contracts. As long as the company's stock price continues to rise, it will be beneficial to Enron. It is nothing more than issuing a batch of new shares when it really loses money. Account paid."
Chen Fan probably understands that Enron raises funds through trust channels, not from banks or issuing bonds, and repays the money through cash or issuing shares.
"According to reports, last year Enron recognized at least 5 million yuan of profit from this contract, which is the loss of their broadband business. This year, it also confirmed 4.5 million yuan in its third quarter report.
The most interesting thing is that Enron confirmed the income of 9.5 million yuan, but did not accrue the loss of the broadband business in the account, that is, the originally balanced investment business inflated the profit of 9.5 million yuan.
Now LJM seems to be running out of cash, but with Enron's sluggish stock price, there is no way to issue new shares to balance the accounts, because this requires the issuance of a large number of shares, which will undoubtedly dilute shareholders' equity.
Moreover, the investors of LJM No. 12 include the First Boston Bank, General Electric, and the American Teachers Fund. Enron can't fill this hole, so it came up with the [-] billion yuan restructuring fee to settle the deal with LJM Asset Management. contracts between companies. "
Zhang Quan was babbling over there, it seemed that he had just received the information, and he should have been analyzing this upcoming report with his colleagues before.
"The newspaper will be published tomorrow, which means that investors in the rice stock market will know about it tonight?"
Chen Fan suddenly asked, "Will the report be taken down?"
"No, now Enron is a bit of a wall on Wall Street, and no one will help them at this time."
Zhang Quan said hurriedly.
"You said, could it be that someone planned to buy a large amount of Enron's stock below 10 yuan, so these two news articles came out, you know, this thing was published in the newspaper, and the news on that website was enough to bring Enron down. It's an abyss, but how do I feel that time is coming together."
Chen Fan's words got stuck at this point, and he didn't know how to continue. It just felt like a coincidence, and the news came out on this day when it was about to fall below 10 meters.
After the rice stock market opens tonight, there will definitely be unprecedented selling pressure in Enron's trading. Either the stock price will plummet, or someone will take the opportunity to attract money, eat as much as they want, and directly complete the acquisition of Enron.
"You mean, someone will attack Enron tonight, collect shares of Enron in the market, and complete the holding of the company?"
Zhang Quan asked uncertainly.
"Didn't we have analyzed it before, and felt that Enron seemed to be hacked by someone, and they had been making small moves behind their backs, but they didn't know what they really wanted. Now it seems that they can complete the control of Enron with a small price. "
Speaking of which, Chen Fan began to calculate, "In March, even if the stock price was 3 million yuan, the value of Enron Company was 70 billion yuan, which is about this number. Up to now, the market value of Enron Company has dropped to more than 525 million yuan. Now, every time the stock price falls by 70 million yuan, Enron's market value will decrease by more than 1 million yuan.
The major shareholder of Enron seems to have less than 20% of the shares. Suppose, if we are more courageous, Enron’s stock price falls to 5 million yuan, and the market value is more than 30 billion yuan. You don’t need 10 billion yuan to become the largest shareholder of Enron. right? "
Regarding Chen Fan's sudden statement, Zhang Quan naturally did not dare to express his opinion. It seems that Mr. Chen intends to acquire Enron Company, and it is not at the expense of his own money, but the proceeds of this short sale, which is only a small part of the proceeds. It can be done for less than half of the total proceeds.
Zhang Quan hesitated there for a long time before he said tentatively: "Mr. Chen, I'm afraid this decision should be discussed with your bosses. In the past, Anran Company was really a good transaction partner, but in the current environment .”
Zhang Quan understood what Chen Fan meant. Someone might attack Anran Company, so of course he can also attack Enron Company. The current Anran Company is like a beautiful woman who has stripped off her clothes. Anyone can do it as long as they have money.
"Do you think the acquisition is risky?"
Chen Fan asked suddenly.
"Mr. Chen, I have reported to you earlier that Enron may have many uncertain debts. If you didn't know before, you would think that Enron is a good acquisition target. But now, I am really not sure. How much debt is not being disclosed and what the end result will be once we are out."
Speaking of this, Zhang Quan still made a tentative suggestion: "It's best to discuss with Mr. Xu and the others to see what their opinions are. If necessary, I will immediately make a letter of opinion to analyze the gains and losses of the acquisition, and to provide For your reference."
"I'm not discussing with you whether to accept or not. I just want to know your opinion. What you said makes sense. I don't know how bad Enron's mess is."
In fact, when Zhang Quan was concerned about the hidden debts of Enron, Chen Fan had already realized that buying Enron was really not a good idea.
How bad Enron really is, who knows?
He quickly hung up the call with Zhang Quan, and Chen Fan couldn't fall asleep right now.
Enron's problems are gradually becoming clear now, and the fraud is gone.
I guessed before that Enron's best asset at present, besides its power plant, may be the "Enron Online" trading platform. After all, it has already controlled the electricity and natural gas trading markets in the United States.
It's great, as a power generation company, it can actually control a country's major energy transactions. Although Enron said that they will not charge transaction fees, everyone knows that Enron participates in the market as a market maker and is fully capable of manipulating prices. Ability,
Pity.
In the end, Chen Fan still didn't dare to make up his mind, so he could only give up the idea of buying Enron.
(End of this chapter)
"Be more specific, what kind of affiliated company?"
At this moment, Chen Fan suddenly became interested in how Enron got money through affiliated companies.
"According to the report, Enron has two affiliated companies, the Marin II Trust and the Osprey Trust.
Enron raised 34 billion yuan through these two funds, but the newspaper's reporters and invited accountants confirmed after carefully reading the last few financial reports of Enron that neither of these two companies appeared in the list of affiliated companies , that is, their business activities are not reflected in the financial statements released by Enron.
They think that it is impossible for these two affiliated companies to carry out financing after the end of the third quarter. It is not so easy to raise 34 million yuan of funds. It must have started in the third quarter, so in the new financial report There should be relevant information, but unfortunately they did not see it. "
"Wait, Affiliate is a trust fund?"
Chen Fan suddenly interrupted Zhang Quan's words and asked.
"Thomas, Enron's chief financial officer, is in charge of these two trust funds, and they are raising funds for Enron. As for how to deal with the money, the report speculates that they probably want to absorb the money through targeted capital increase and share expansion. Because Enron simply had no other way of handling the bill."
Zhang Quan explained, but went on to say: "The report also analyzed Enron's third quarterly report. According to Enron's conference call on the third quarterly report, Enron's two huge one-time restructuring fees became the focus. That is to say, Enron claimed that it suffered a loss in the third quarter due to a restructuring fee of 10 billion yuan, but it actually concealed more losses.
The first restructuring fee includes 10 billion yuan of restructuring and loss charges for closing water plant business, broadband communication network and other real estate investment projects, but analysts also noted that Enron's operating costs in the third quarter were higher than those in the previous two quarters. But they were more than 2 million yuan lower.
Buy-side analysts speculate that Enron may include some of its normal operating expenses in a "one-time restructuring fee" to increase Enron's operating profit and make its reports look better.
The second reorganization fee is a reorganization fee of 12 billion yuan for the interruption of the financial contract with "a certain affiliated enterprise". Into the current income statement, but directly deducted from the balance sheet shareholders' equity, which means that the shareholders' net assets will decrease by 12 billion yuan. "
"That is to say, strictly speaking, in Enron's third quarter report, under normal circumstances, their loss is not more than 6 million yuan, but 18 billion yuan?"
Chen Fan frowned and asked, but before seeing the detailed information, it is really hard to say whether the loss of the buyout contract should be included in the current income statement or included in the previous year's profit and loss adjustment, but this is only for accounting. For those who read the report, this should be the understanding.
"Yes, I have already asked a professional accountant to read Enron's detailed financial report, but I haven't received a response yet."
Zhang Quan replied.
"Let's talk about the quarterly report first. When Enron said it would shut down the water business and some other projects, I also guessed that there would be losses. This report is to suspect that they included the company's operating expenses in this loss, right? "
Chen Fan said, but without waiting for Zhang Quan to answer, he said to himself: "There is also the 12 billion yuan. They think it belongs to the previous year's profit and loss. It is not reflected in the current income, but directly from the shareholders' equity. deducted?
This is cunning enough. If you don't read the financial report in detail, you may not find it. "
Chen Fan sighed at this moment, Enron really knows how to play.
"The most important thing is the matter of those two funds. They raised more than 30 billion yuan in the name of private placement of new shares by finding money privately. Now that the shares have not been issued, the money is used to repay the loan?"
"That's what it means. The establishment of these two funds should be specially prepared for raising funds."
Zhang Quan said.
"No, now where Enron's stock price has fallen, who the hell would believe them? If you pay for Enron's stock now, don't you encounter a fool?"
Chen Fan said suddenly, feeling that he couldn't explain it.
"According to reports, these two funds have been operating this matter for a long time. In the first half of the year, when the stock price was around 50 yuan, they had already started to operate."
Zhang Quan said: "According to undetermined sources, the website noticed this matter because some investors wanted to go back on their word and withdraw from the project, but found that the money had been embezzled, so they paid off the debt."
"That's it."
Chen Fan already understood Enron's way of making money. It should be that when the stock price trend had not yet collapsed, they secretly set up a trust fund to raise funds in order to target banks and other financial institutions that would no longer increase their financing quota. The method of additional issuance of Enron shares attracted investment.
At that time, Enron's stock price trend was not so-so. Although it had already weakened, obviously these Christians did not think that Enron's stock price would continue to fall, and it seemed that there was still a chance to pick up a bargain in the current decline, so they poured money into it.
But now that Enron's stock price is nearly collapsing, it's natural that they don't want to throw money into this bottomless pit, even if it's discounted according to the market price. Maybe that little discount will disappear after the stock price falls for two days.
Chen Fan felt that he probably understood what the news was, so he planned to hang up the phone. It was useless to continue thinking at this time. After the rice stock market opened at night, people would naturally vote with their feet.
At this moment, Chen Fan, who was about to hang up the phone, vaguely heard someone talking on the other end of the phone, and then heard Zhang Quan say over there: "Mr. Chen, wait a minute, I got some New thing."
It seemed that there was some new news from Zhang Quan, so Chen Fan had no choice but to wait and hear what new news Zhang Quan had.
But this time Chen Fan had been waiting for a long time. From time to time, he could still hear the voices of Zhang Quan and another person on the other end of the phone, but they were very vague, and he couldn't hear them clearly at all. He didn't know what they were talking about.
Chen Fan had no choice but to sit on the bed, not knowing when Zhang Quan would suddenly speak, so he could wait quietly.
After a long time, Chen Fan's patience was almost exhausted, and Zhang Quan's high-pitched voice suddenly came out from the phone's microphone.
"Chen Fan, I know how Enron operates."
Surprised by Zhang Quan, Chen Fan wanted to get angry a little bit, "Speak up, I'm listening."
"Enron is indeed concealing its debts. This is the article on the front page of the Wall Street Journal tomorrow, which details the previous loss of 12 billion yuan. It should be the big news that their people tracked down.
Enron was previously developed by Andrew Fastow, the company's financial director at the time. After the U.S. technology stock bubble burst last year, because they were worried about the loss of the broadband business invested by the company, they created LJM Asset Management Company and issued three phases of trust funds. They are LJM No. 12, No. [-] and No. [-] respectively. The loss of [-] billion yuan this time is probably due to LJM Company.
According to the report, the non-disclosure agreement signed by LJM No. [-] and Enron covers Enron's broadband business, which is equivalent to a bet. The conditions are also very interesting. If the assets of Enron's broadband business appreciate, LJM No. [-] will share this part of the premium , if it is depreciation, it is LJM No. [-] who bears the loss.
The 12 billion yuan raised by LJM No. 12 will go into the company, but if LJM No. [-] encounters a liquidation crisis, Enron guarantees to pay [-] billion yuan in cash or equivalent stocks, basically Enron guarantees the project. "
"I see, the other two trusts are also similar gambling contracts. As long as the company's stock price continues to rise, it will be beneficial to Enron. It is nothing more than issuing a batch of new shares when it really loses money. Account paid."
Chen Fan probably understands that Enron raises funds through trust channels, not from banks or issuing bonds, and repays the money through cash or issuing shares.
"According to reports, last year Enron recognized at least 5 million yuan of profit from this contract, which is the loss of their broadband business. This year, it also confirmed 4.5 million yuan in its third quarter report.
The most interesting thing is that Enron confirmed the income of 9.5 million yuan, but did not accrue the loss of the broadband business in the account, that is, the originally balanced investment business inflated the profit of 9.5 million yuan.
Now LJM seems to be running out of cash, but with Enron's sluggish stock price, there is no way to issue new shares to balance the accounts, because this requires the issuance of a large number of shares, which will undoubtedly dilute shareholders' equity.
Moreover, the investors of LJM No. 12 include the First Boston Bank, General Electric, and the American Teachers Fund. Enron can't fill this hole, so it came up with the [-] billion yuan restructuring fee to settle the deal with LJM Asset Management. contracts between companies. "
Zhang Quan was babbling over there, it seemed that he had just received the information, and he should have been analyzing this upcoming report with his colleagues before.
"The newspaper will be published tomorrow, which means that investors in the rice stock market will know about it tonight?"
Chen Fan suddenly asked, "Will the report be taken down?"
"No, now Enron is a bit of a wall on Wall Street, and no one will help them at this time."
Zhang Quan said hurriedly.
"You said, could it be that someone planned to buy a large amount of Enron's stock below 10 yuan, so these two news articles came out, you know, this thing was published in the newspaper, and the news on that website was enough to bring Enron down. It's an abyss, but how do I feel that time is coming together."
Chen Fan's words got stuck at this point, and he didn't know how to continue. It just felt like a coincidence, and the news came out on this day when it was about to fall below 10 meters.
After the rice stock market opens tonight, there will definitely be unprecedented selling pressure in Enron's trading. Either the stock price will plummet, or someone will take the opportunity to attract money, eat as much as they want, and directly complete the acquisition of Enron.
"You mean, someone will attack Enron tonight, collect shares of Enron in the market, and complete the holding of the company?"
Zhang Quan asked uncertainly.
"Didn't we have analyzed it before, and felt that Enron seemed to be hacked by someone, and they had been making small moves behind their backs, but they didn't know what they really wanted. Now it seems that they can complete the control of Enron with a small price. "
Speaking of which, Chen Fan began to calculate, "In March, even if the stock price was 3 million yuan, the value of Enron Company was 70 billion yuan, which is about this number. Up to now, the market value of Enron Company has dropped to more than 525 million yuan. Now, every time the stock price falls by 70 million yuan, Enron's market value will decrease by more than 1 million yuan.
The major shareholder of Enron seems to have less than 20% of the shares. Suppose, if we are more courageous, Enron’s stock price falls to 5 million yuan, and the market value is more than 30 billion yuan. You don’t need 10 billion yuan to become the largest shareholder of Enron. right? "
Regarding Chen Fan's sudden statement, Zhang Quan naturally did not dare to express his opinion. It seems that Mr. Chen intends to acquire Enron Company, and it is not at the expense of his own money, but the proceeds of this short sale, which is only a small part of the proceeds. It can be done for less than half of the total proceeds.
Zhang Quan hesitated there for a long time before he said tentatively: "Mr. Chen, I'm afraid this decision should be discussed with your bosses. In the past, Anran Company was really a good transaction partner, but in the current environment .”
Zhang Quan understood what Chen Fan meant. Someone might attack Anran Company, so of course he can also attack Enron Company. The current Anran Company is like a beautiful woman who has stripped off her clothes. Anyone can do it as long as they have money.
"Do you think the acquisition is risky?"
Chen Fan asked suddenly.
"Mr. Chen, I have reported to you earlier that Enron may have many uncertain debts. If you didn't know before, you would think that Enron is a good acquisition target. But now, I am really not sure. How much debt is not being disclosed and what the end result will be once we are out."
Speaking of this, Zhang Quan still made a tentative suggestion: "It's best to discuss with Mr. Xu and the others to see what their opinions are. If necessary, I will immediately make a letter of opinion to analyze the gains and losses of the acquisition, and to provide For your reference."
"I'm not discussing with you whether to accept or not. I just want to know your opinion. What you said makes sense. I don't know how bad Enron's mess is."
In fact, when Zhang Quan was concerned about the hidden debts of Enron, Chen Fan had already realized that buying Enron was really not a good idea.
How bad Enron really is, who knows?
He quickly hung up the call with Zhang Quan, and Chen Fan couldn't fall asleep right now.
Enron's problems are gradually becoming clear now, and the fraud is gone.
I guessed before that Enron's best asset at present, besides its power plant, may be the "Enron Online" trading platform. After all, it has already controlled the electricity and natural gas trading markets in the United States.
It's great, as a power generation company, it can actually control a country's major energy transactions. Although Enron said that they will not charge transaction fees, everyone knows that Enron participates in the market as a market maker and is fully capable of manipulating prices. Ability,
Pity.
In the end, Chen Fan still didn't dare to make up his mind, so he could only give up the idea of buying Enron.
(End of this chapter)
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