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Skilling fed analysts false data, Enron jurors told

HOUSTON -- Nine months before Enron Corp. flamed out in bankruptcy, investors were questioning the strength of its businesses despite public assurances from founder Kenneth Lay and former chief executive Jeffrey Skilling that all was well, jurors in their fraud and conspiracy trial learned yesterday.

Those questions and a stock price that dropped to less than $60 per share from its high of $90 prompted Skilling to hold a conference call in March 2001 to reassure Wall Street on Enron.

''I have no idea why the stock is down," Skilling told influential analysts. ''I know this is a bad stock market, but Enron's in good shape."

The tape was played during former Enron investor-relations chief Mark Koenig's fifth day on the witness stand.

Prosecutors have played clips of video and audio to bolster allegations that Skilling and Lay repeatedly lied about Enron's financial health and hid bad news to inflate company stock.

The defendants counter that there was no fraud at Enron and its implosion stemmed from negative publicity that triggered a loss of market confidence.

Days before the conference call, Enron announced that a 20-year video-on-demand partnership with Blockbuster Inc. was dead, a year after the company announced the deal with much fanfare.

Skilling told analysts on the call that Blockbuster hadn't gotten the movies to provide video-on-demand, so Enron was ''out getting the content ourselves." He also sought to squelch rumors that Enron's bandwidth trading efforts were flailing, noting, ''This business is absolutely developing, it is ahead of plan."

Investigations revealed later that neither video-on-demand nor bandwidth trading got off the ground.

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