Essay by WLH_916College, UndergraduateA, July 2006

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In August of 2000, Enron's stock price hit its highest value of $90. It was at this point in time that Enron's executives, who possessed the inside information of the hidden losses, began to sell their stock. At the same time, the general public and Enron's investors were told to buy the stock, as the sky was the limit. Enron's executives told the investors that the stock would continue to climb until it reached possibly into the $130 to $140 range, while secretly unloading their shares as they knew the opposite to be true.

As executives were selling off their shares of stock, the price continued to drop. As the price dropped, investors were told to continue buying stock or hold steady if they already owned Enron because the stock price would rebound in the near future. Kenneth Lay's strategy for responding to Enron's continuing problems was in his appearance.

As he did many times, Lay would issue a statement or make an appearance to calm investors and assure them that Enron was headed in the right direction.

By August 15, 2001, Enron's stock price had fallen to $42 compared to its high of $90 just a year prior. Many of the investors trusted what Lay was telling them and still believed that Enron would rule the market. The investors continued to buy or hold onto their stock and lost more money every day. As October closed, the stock had fallen to $15 per share and many investors saw this as a great opportunity to buy Enron stock because of what Kenneth Lay had been telling them in the media. Just under a month later, on November 28, the stock price would slip below one dollar as the public was finally made aware of the millions of dollars in...