Enron

In October and November 2001, newspapers were full of stories regarding the collapse of the Houston-based energy trading giant Enron (ENE). On October 16, Enron Corp. disclosed a $1 billion charge mainly connected with write-downs of investments, resulting in a $618 million third-quarter loss and $1.2 billion reduction in shareholder equity. Part of the charge was connected with a pair of limited partnerships that were run by Enron's CFO, Andrew Fastow. An SEC inquiry followed. By the first week of November, Enron’s stock had dropped to under $10/sh from over $30 on October 17 and around $80 at the end of 2000. On November 6, Enron was reportedly seeking a cash infusion of at least $2 billion in exchange for an equity stake.
Dynegy Inc., another Houston-based energy trading and power company, was specifically mentioned to be seeking a deal on November 7 for roughly $7 billion to $8 billion in stock. On November 12, a deal was announced at 0.2685 Dynegy shares for each of Enron...