To entice participants and trading partners, Enron offered its reputation, credit, and expertise in the energy sector.Enron was praised for its expansions and ambitious projects, and it was named "America's Most Innovative Company" by One of the many unwitting players in the Enron scandal was Blockbuster, the former juggernaut video rental chain.
In Enron's case, the company would build an asset, such as a power plant, and immediately claim the projected profit on its books, even though the company had not made one dime from the asset.
In July 2000, Enron Broadband Services and Blockbuster entered a partnership to enter the burgeoning VOD market.
The VOD market was a sensible pick, but Enron started logging expected earnings based on the expected growth of the VOD market, which vastly inflated the numbers.
Hundreds of millions of dollars were spent on this project, but the company ended up realizing almost no return.
When the recession hit in 2000, Enron had significant exposure to the most volatile parts of the market.