Naming and Branding Agency

A man about a horse

Former Enron Broadband CEO Ken Rice laid out the power of language in court this week, demonstrating the value inherent in what a business is called. From Fortune:

He later described a May 1999 meeting where Skilling advised Enron’s top executives that, to boost the company’s shares, they needed to help him dream up an alternative to describing Enron as a “trading company” — since Wall Street viewed trading companies as risky ventures, and refused to give them lofty multiples. Management soon embraced a new mantra: Enron was a “logistics” company, engaged in “intermediation.” Its multiple began to soar.

The rollout of the broadband business accelerated that process. When Enron announced broadband’s new status as one of the company’s “core” businesses at a January 2000 analysts’ meeting, Enron shares leapt 25 percent overnight. The problem? “The business had very few customers and almost no deal flow,” Rice testified. And, oh yes — costs of $100 million a quarter.

Alas, the power of language and the leverage it wreaks in framing perception is equally potent in the cloven grip of a centaur as it is in the hand of man.

Stay tuned — coming up next on ‘My Little Pony’, Honolu-Loo pony hedges against U.S. inflation by going long on Japanese equities and buying puts on the yen.

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