Energy giant Enron Corp.’s shares were the second most actively traded Wednesday following the surprise resignation Tuesday of CEO and Pres. Jeffrey K. Skilling.
Enron’s stock closed down $2.68 or 6.2% at $40.25/share, after falling to $36.87 at one point in the day. Volume was 26.5 million shares, compared to average daily trading volume of about 3.4 million shares.
Since March, Enron’s stock price has fallen from a high of $90.56 in August 2000, to less than half of that.
In the wake of Skilling’s departure some analysts lowered their target prices for the company, while others said they didn’t expect it to have a material effect on the company.
In a research note, Ron Barone, an analyst with UBS Warburg, said despite ongoing expansion, the company has been plagued by a series of “negative issues while its overall quality of earnings has deteriorated, its level of behind-the-scenes financial engineering has increased, and its overall standing with the Street has plunged.”
Barone said he now expects Enron to work toward “delivering a much cleaner and candidly disclosed operating performance that so many of its peers are held up to and that so many of us have desired for some time.” Analysts were growing increasingly irritable with management’s inability to produce a balance sheet at the same time the company reported quarterly earnings.
In a conference call late Tuesday, Chairman Kenneth Lay sought to allay Wall Street jitters, insisting there are no forthcoming surprises about the company’s operations or outlook that prompted the resignation.
“There are no changes in the earnings outlook,” he said, and “no changes in business strategy.” Lay noted the board had just met for a regular two-day meeting, and there were no “accounting, trading, or reserve issues” to be concerned with.
Lay will assume the added responsibilities of president and CEO, positions he held for 15 years until Skilling took over in February. Skilling said after the market closed Tuesday he was resigning for unspecified personal reasons after less than a year at the helm.
The hard charging Skilling is credited with helping create Enron’s business in natural gas marketing and trading, contributing to the industry’s first forward markets when he joined Enron in 1990 after serving as a management consultant with McKinsey and Co.