Coquettish Rebirth

Originally, Jia Hongjian wanted to pay attention to the box office war, but soon his attention was drawn away because An Ran finally went bankrupt!It turned out that after the US Securities Regulatory Commission began investigating Enron in September, this Enron scam was unlikely to be sustainable.After the US Securities Regulatory Commission began to investigate Enron, rating agencies such as Merrill Lynch and Standard & Poor's all wanted to downgrade Enron's stock rating and lower the status of the original recommended stock.But at this time, in order to restore the decline, Enron chose to mortgage assets to obtain credit line guarantees, and wanted to make their cash flow look better in this way-they exchanged mortgages with banks such as JP Morgan and Solomon A credit line guarantee of 9 billion US dollars. I want to mortgage some assets in exchange for some funds to cover the 10 million US dollars of losses that burst out, so that the game of the entire company can continue to play, or fool the rating agencies. Let them stop rushing to downgrade the rating before the investigation results come out, so as not to affect the stock price...

But obviously not everyone can be fooled by them, some Wall Street institutions lowered their ratings on Enron, and then Enron's stock began to fall!In October, after the investigation by the US Securities Regulatory Commission was almost over, Enron seemed to realize that he might suffer, so he chose to surrender himself in exchange for leniency—they admitted that they had made false accounts, and they also admitted that they had never They have been making false accounts since 10.After so many years, they have falsely reported a total of more than 97 million US dollars in profits. In other words, according to the current book, they have lost more than 6 million US dollars for no reason, just like they had to adjust in July. The loss announced by the so-called profit situation is almost the same!

Such a frank confession made Americans dumbfounded all of a sudden!In the past, Americans always thought that the United States was the lighthouse of the world!After winning the Cold War, they always thought that every corner of their United States was a model for the world, the best model on earth!They have all kinds of confidence in their various systems.It seems that no matter what system other people's family has compared with theirs in the United States, it is not perfect!The result is good now, such a stock market in the United States that has been playing for more than 100 years has unexpectedly exploded with such a large company making false accounts!What is this concept?

This Enron used to be one of the world's largest electricity, natural gas and telecommunications companies, with a disclosed turnover of US$2000 billion in 1010.The company has been selected as "the most innovative company in America" ​​by "Fortune" magazine for six consecutive years!In 2000, Enron was even more powerful than Microsoft, so I don’t know how much it lost!This is tantamount to suddenly announcing that a giant like Microsoft has been making fake accounts!And the one who made fake accounts for them was the accounting firm in the United States that thought it was the number one in the world!Does your sister make the common people believe in something?Why are all the world number ones in a row suddenly kneeling down?And tmd are all from the United States?

Originally, Enron had already started merger negotiations with a company called Di Nuoji in the second half of the year.And it was acquired by that company.Originally, in mid-October, just before Enron confessed, everyone had just reached an agreement, announcing that Di Nuoji would buy Enron through a stock exchange at a price of 10 billion US dollars, and at the same time bear Enron's huge debts.But this matter has just been announced, and everyone has not had time to conduct various audits.An Ran suddenly confessed!Then, seeing the stock price plummeting all the way, Nadinuoji directly announced that he would give up the acquisition!

So when Enron Jinchan couldn't get out of the shell, and at the same time when the US Securities Regulatory Commission was considering how to punish it, the stock price in the market plummeted all the way, and the ratings given by various institutions also plummeted!From the original recommended level in May and June, it began to decline all the way.At the beginning of November, Standard & Poor's gave a bbb-level evaluation, which is quite unfavorable, and then 11 days later, the bbb was changed to b-, which means it suddenly became a junk stock!Moody's Investors Service also announced that it downgraded Enron's rating from baa20 to b3, and other rating agencies also dropped their ratings all the way. Basically, everyone treated Enron's stock as a junk stock!In this worsening situation. On November 11, Enron's stock fell directly to $30 per share. What does this mean?It means that the entire Enron has reached this November 0.26th, and the overall market value is actually only 11 million U.S. dollars!That's right!Only 30 million!At the beginning of 2, the company's share price was almost US$2, and the overall market value was close to US$2001 billion!Within one year, directly from 100 billion to 800 million!

It can be said that by this time, An Ran really has become insolvent.After a delay of over 20 days, on December 12, Enron officially declared bankruptcy.They then filed for Chapter 23 bankruptcy protection in US bankruptcy court.In the list of various assets listed, the so-called assets have a total nominal value of 498 billion US dollars!Suddenly this became the largest bankrupt company in American history!Such a company went bankrupt, and then the US Securities Regulatory Commission officially announced the results of their investigation-it turns out that the CEO of Enron Company secretly sold stocks in various ways when the company's stock price was high, relying on selling his own company's shares. Stocks and they became all kinds of rich people!It can be said that they do.That's all relying on all kinds of bragging to make the company's future bright, and then attract people to buy stocks, causing the stock price to rise, and then they secretly sell it to pay back the money!It can be said that this is completely treating the company as a tool for the CEO and other executives to make money in private!

While announcing such a thing, the US Securities Regulatory Commission also announced a series of details of how Enron cheated. It turns out that since 97, Enron has been cheating in various ways.Their fraud is not just about making false accounts, but spending a lot of money to hire Arthur Andersen, the largest accounting firm in the world, to be a consultant for them on non-audit projects!To put it simply, they spent money to ask Andersen how to make fake accounts!So Andersen taught them the method, which is to establish a complex company-related system through various capital reorganizations.In short, under the guidance of Andersen, Enron has established more than 3000 companies, and these 3000 companies are interconnected.In the end, a pyramid-like corporate relationship is formed!Then later, they simply used all the money earned from their main business for capital reorganization-in short, they used various subsidiaries and grandchildren of their holding companies to invest some money to hold some new companies, and then it was equal to their Take control of a new business with very little money.

This seems complicated?Actually not at all!All in all, Enron, as a company, established company B but only holds 51% of the company.The other 49 find other people to invest.Then, this company b was used to establish or acquire 51% of the shares of company c. In this way, does company a control company c by controlling company b?But in fact, in conversion, this company a is equivalent to spending the money to establish 25.5% of the shares of c company to control such a c company!Later, after having some H-level company or even some M-level company's children, Enron spent less money, but the control was greater and wider!What's the use?This is very useful!Although most of these affiliated companies, especially those companies that are getting below.Their profitability will not affect Enron's performance much.But don't forget that there are also various related company transactions!

Enron controls more than 3000 companies. If each company spends 3000 million U.S. dollars to purchase products from a company like Enron, will Enron have a turnover of 3000 billion in one fell swoop?With the turnover of 1 billion yuan, if they take the profits and invest them in the business of establishing affiliated companies, will they be able to control more companies?Can more companies spend [-] million US dollars to purchase their products?It can be said that this is almost like illegal fundraising, just like pyramid schemes!As long as there are enough companies in the market that can be easily controlled.Then such a game of Enron will not collapse!

And this is the method Andersen taught An Ran!However, this method just takes advantage of the loopholes of the American Accounting Standards, because the standards stipulate that if a company controls less than 50% of another company's shares, it does not need to include the losses of such an affiliated company in the parent company's books in proportion.But don't forget that Enron has a lot of subsidiaries in layers. When they controlled the first-level subsidiaries, they still controlled 1% of the shares, but when they reached the second-level subsidiaries, they only had 51% of the superficial shares!Although they still control the second-level subsidiary through the first-level subsidiary, the losses of the second-level subsidiary will not be related to Enron!So it controlled the losses caused by the second-tier subsidiary buying Enron's things at high prices.On the books, it has nothing to do with Enron!

Such a professional fraud really made all Americans look stupid!Because the people of the US Securities and Exchange Commission have confirmed a result - such a complicated fraudulent model, it is completely a super-professional exploit of the loopholes in the relevant regulations.And this method of exploiting loopholes, it can be said that not only ordinary investors can't see it, even if you just find a Wall Street analyst, they may not be able to see it!This stuff has to be a top accountant, something only the best accountants might know!So it took a long time for the SEC to investigate this point!

After such a statement came out, the entire American people were dumbfounded.And after being dumbfounded, the whole people no longer believe in any stocks!Since even a company like Enron, which ranks seventh in the top 500, can use such a professional method to fake, then what company can't fake it sooner?Enron's report looks so good.Analysts on Wall Street kept saying that the company was good, but what happened?It is simply a lie!All of a sudden, it can be said that American investors have lost confidence in the US stock market!Then the U.S. stock market began another round of stock market crashes!The stocks of various companies will fall all the way regardless of whether their performance is good or not!According to the analysis of analysts on Wall Street, if it continues to decline at this rate, it will only take half a year to lose 2 trillion US dollars in market value.It is equal to one-fifth of the U.S. gdp, and the market value can drop 4 trillion U.S. dollars a year, which is equivalent to 40% of all Americans working for nothing a year!

And the U.S. stock market has started a new round of stock market crashes, and other stock markets have not been affected?The major stock markets in Europe and the stock markets in Tokyo, Hong Kong, Singapore, and Australia also fell sharply, and then various influences continued, such as the U.S. dollar also began to fall. At the same time, in the futures market, metal transactions are especially related to Enron Metals trading fluctuated wildly.The bond market was also in turmoil, while gold prices rose all the way.It can be said that at the end of 2001, the whole world was on the verge of a big collapse!It's a bit like rushing after 08!