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April put options with a strike price of 3.00 cost 1.60. This means that CPN will only have to fall another to below 1.40 to make these options worth something. Look for a good ruling from the judge to lift the stock price and depress the options. Even with a good ruling from the judge I don't believe Calpine has a way out.

"The judge has not said which way he will rule in the case, but he indicated he would be reluctant to issue a decision that would force Calpine into bankruptcy."


Yeah, the judge doesn't want to force them into bankruptcy, but he need not fear -- the company can do that all on their own!

So now the decision is in and SURPRISE Calpine lost the case. Perhaps most amazing is that the PR department has been silent so far. Somebody must have duct-taped their fingers to their desks to keep them from getting online and sending out more fluff.

The Calpine bond rating was downgraded even before this latest setback, and people are still saying, "Golly, this will make it hard for them to reduce that $17 billion in debt." <LOL> Yeah, hard indeed. It's hard to imagine that they own very much anymore that isn't already collateralized (like the natural gas assets were, for example).

I do not claim to be an expert but that won't stop me from opining. It seems to me the only possible fix for this company is restructuring. They have been in a ridiculous, never-ending "bandaid" mode for over 2 years, and it has just made things worse.

But the board of directors is either too lame, or too corrupt, to preside over a reorganization. Cartwright should have been forced into retirement, Ann Curtis should have been forced off the board, and perhaps Bob Kelly should have been relieved of duty as well. Not to mention that "Risk Management" guy who was recently made an Exec VP. What a lot of dead wood!

As for those April put options -- well, the stock has traded as low as $1.31 today. That's the lowest in at least 5 years, I believe. It's back up a little now, but if it goes back down (without disappearing altogether) then those options would be in the money.

Just a waystation on the train to oblivion!

Meanwhile I have not seen anything coming out of those kooks at Calyon, who put a Buy rating on the stock a couple months ago. There are some real chuckleheads handing out investment advice, that's for sure.

And where is that $#&$@! who was here trying to play stock analyst, right before the Q2 earnings report? I want that guy to come back here and grovel in the glaring light of the truth about this company and this stock. The stock is worth well under half what it was worth at that time, despite all his bullish predictions. Pfft.
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