'The Company Is Fundamentally Sound'—Weeks Before Enron Imploded, Kenneth Lay Told Employees To Keep Buying Stock

In the fall of 2001, as Enron’s internal problems mounted and its stock price tumbled, Chair Kenneth Lay told employees the opposite of what was really going on.

“The company is fundamentally sound,” Lay said during a company-wide electronic forum on Sept. 26, 2001. “At current stock prices… this seems to be an incredibly cheap stock.”

FLASHBACK: Kenneth Lay told Enron employees to hold onto to their stock and buy more in an all-hands meeting right before it crashed out. $ENE $TSLA https://t.co/nS7An71U5L pic.twitter.com/OkZYUW1nqu
— Suspected Saboteur (@ShortingIsFun) March 21, 2025

Don't Miss:

Deloitte's fastest-growing software company partners with Amazon, Walmart & Target – Many are rushing to grab 4,000 of its pre-IPO shares for just $0.26/share!
This platform is reshaping how you invest in private companies — and you can be a part of it for $0.18 per share

Lay urged staff to talk up Enron and even suggested they tell family and friends to buy in. His upbeat message came just weeks before the company revealed disastrous quarterly results and a $1.2 billion hit to shareholder equity, which ultimately helped trigger Enron’s historic collapse.

Lay's statements were made while Enron was actively hiding massive losses and questionable accounting practices. At the time, employees could still sell shares from their 401(k) retirement plans. But that window closed a month later, on Oct. 26, when the company locked down employee trading for administrative reasons. The lockdown lasted until mid-November—during which time Enron stock lost two-thirds of its value.

Trending: This startup is on the brink of a huge disruption to a $654 billion industry – invest in it for under $10 before it's too late.

Shares, which had already dropped from a high of $90 in 2000, closed at $25.15 the day of Lay's message. A month later, they were down to $15.40. By Dec. 2, the day Enron filed for bankruptcy, they were worth just $0.51.

Lay's Claims Didn't Match Reality

During the virtual meeting, Lay also claimed he had been buying more Enron stock himself. While technically true, public filings show those purchases came from exercising options at a steep discount—limiting his actual financial exposure. At the same time, Lay had made about $146 million in gains from selling Enron shares in 2000 and early 2001.

See Also: Hasbro, MGM, and Skechers trust this AI marketing firm — invest pre-IPO from $0.55 per share now.

He also downplayed concerns about Enron’s complex financial structures, saying they had been reviewed and approved internally and by the accounting firm Andersen. But Lay had already been warned by Enron Vice President Sherron Watkins about potential problems with those same structures. Enron had even hired a law firm to investigate her concerns before the meeting.

Still, Lay reassured employees: “We are convinced by all of our internal officers as well as our external auditor and counsel that they were legal and totally appropriate.”

‘Hang on to your stock’ — Familiar Words

More than two decades later, the line between confidence and misdirection is being tested again. Just this week, Tesla TSLA CEO Elon Musk told employees to “hang on to your stock” during an all-hands meeting, arguing Wall Street doesn’t fully grasp the company’s potential in robotics and autonomous driving. Tesla stock rose over 5% the next day, though it remains down sharply for the year.

Read Next: