WorldCom (WCOM)

Image from bigcharts.com

Here is an example similar to Enron. The company's share price's rate of increase was unsustainable. Efforts by management to maintain the incredible climb in the share price failed. This company was buoyed by the same internet bubble and share frenzy of the 90's that felled so many  tech and telecom sectors. With heavy loans and promising investments that failed, investors became nervous and started selling. Following Enron's failure, investors were especially concerned about the effects of accounting changes on its balance sheet . This extreme downturn could have been managed using the principles of chaos theory. In 1999, managers should have seen that their share price's rate of increase was dangerously high and focused on reducing debt (on April 3 2002,  Wednesday, WorldCom said its total debt was $30 bn, against cash of $2.2 bn). The principle is very simple. The above collapse is an example of bad management. Investors can take advantage of such foolish management by knowing when to sell, based on the chaos theory principles. One wonders if such trends are not orchestrated to milk inexperienced investors of their hard earned income.