Stock Price Psychosis and the Pathology of a Corporate Meltdown: The Collapse of Enron

Abstract

The word ‘Enron’ today refers to much more than the company that bore its name. It is now treated as the most potent symbol of the excesses of the ‘Roaring Nineties’ (Stiglitz 2003); as a warning of the multiplicative economic effects of personal indiscretions (Cruver 2003); as the most important manifestation of the decline of corporate ethics (Rockness and Rockness 2005); as short-hand for the erosion of trust in the authenticity of company accounts (Unerman and O’Dwyer 2004); as evidence of the contradictions of shareholder capitalism (Froud et al 2004); and as a measure of the hubris that enveloped the stock market during the dotcom bubble (Bryce 2002).