The week before last I wrote about Enron (NYSE: ENE) and several of you alert readers pointed out an error I made in one statement. I mentioned that Enron had a debt-equity ratio of 0.92, which meant it had "slightly more debt than equity." Well, actually I should have written "slightly more equity than debt." My apologies for the error. As much as I try to avoid them, sometimes they do creep through.

I wrote that column the night before leaving on a trip to Korea. While I was in Korea, I was e-mailed by people from Enron, Williams Communications (NYSE: WCG), and several Fools knowledgeable in this area. I'm going to call Enron and Williams this week, and we'll go over those conversations in upcoming columns. Meanwhile, let me quote a Fool who works in this business for a privately held company:

  1. "Enron's biggest wholesale energy trading competitor right now is the unregulated trading wing of AEP. Williams is a similar company, and I would consider them in your analysis, but you will need to take a close look at the unregulated side of several utilities, including the Southern Companies, Duke, and Reliant (formerly Houston Industries). Of these, I feel that Southern is probably closest to Enron from a market development perspective.

  2. "There are several electronic trading services trying to become the "standard" for energy trading, including HoustonStreet, APX, Bloomberg, and Altra. Enron is taking an interesting approach to e-trading... Rather than offer an online clearinghouse, they're making extremely tight two-ways on many different commodities, and if you want to transact you're always trading with them as a counter party. This is a great service from a credit management perspective, which has been one of the land mines we've been tap dancing on for the last couple of years in this business.

  3. "Enron's commitment to broadband development is huge... They just gave Sycamore Networks a $200 million development contract, for example. ($200 million would buy you a lot of market share if you wanted to take over an energy trading company.) You should check out for more info... [Of note] on that website is the long, long list of "help wanted" positions. The information being given away on this site is nothing short of incredible. (For More Information, check out

  4. "Enron is positioned to emerge as a winner in the struggle between the "old model" of traditional public-sector utility operations and the "new model" of integrated energy and information services companies. If you want to buy a progressive energy company, Enron is it. A good bit of the volatility you've seen in the last couple of summers is due to this industry-wide shift in business models, and it makes an interesting topic for conversation.

  5. "Basically if it involves pushing stuff through a thin pipe or wire, Enron does it."

A Penny Stock Scam

Now, let me go a little off topic from Drips and mention a new version of a penny stock scam that a woman sitting next to me on the plane I took back from Asia told me about. She owned shares in a major company listed on the Nasdaq, and apparently had posted some thoughts on it in various message boards. She received an official looking e-mail informing her that her company was spinning a new company off in an IPO. To get in on it, she only needed to buy shares in the new company, and for each share she bought, she would get an additional 15 shares "after the IPO."

Well, she bought the shares of the other company through her broker. I pointed out to her that this meant an IPO had already happened. She also had no written communication from the Nasdaq company she owned the stock in -- another bad sign. When I got home, I looked up the company that was "having an IPO" and guess where it's listed? It isn't; it's a bulletin board stock and isn't even selling for a dollar a share. A penny stock hustler harvested her name from a message board and sent her an official looking e-mail to build up sales for a pump and dump scheme. She bought the stock at $6 a share by the way.

I personally can't feel too smug about online scams. I got one I almost fell for in Korea. I was sent a "Hallmark Greeting" in an official e-mail. However, it didn't identify who sent me the "greeting." I went to the site (which looked quite official), and there was a warning advising me that my anti-virus software might say a virus was being downloaded. I was told to "just ignore it" (uh-oh). The anti-virus software promptly came up and warned me that the site was trying to download a "Trojan horse," which I assume was meant to steal my AOL password. To be sure, I changed my password once I got home.

Please be careful with anything you receive online. Don't download files or visit links sent to you by unknown senders. Don't give out any of your passwords to anyone online. Be leery of investment advice, or "shareholder communications," that can't be confirmed. It's important to be skeptical about anything that requires you to spend money, and of course if something sounds too good to be true, it usually is just that.

Related Link:
  • How to Avoid Securities Fraud, Motley Fool Special Feature