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More from Stephen Simpson's article:

Using the oft-cited "new direction for the company" excuse, the board gave the heave-ho to Peter Cartwright and Robert Kelly. While director Ken Derr (formerly the CEO of Chevron) has been installed as the temporary CEO, the company's press release said that a new CEO will be chosen in the "very near future."

That's kind of interesting and suggests that this move was long in coming.

Well, I don't see any signals that the move was "long in coming." The language "very near future" is just standard issue and means nothing.

But the move was HORRIBLY OVERDUE. Those guys should have been canned long, long ago. Here is my favorite comment from that article at An analyst at BOK Financial Corp. said "The company has been avoiding bankruptcy because Cartwright and Kelly just didn't want to file."

Sometimes the RIGHT thing to do is to file for bankruptcy. If there is financial trouble brewing, you nip it in the bud, do whatever restructuring or reorganization is needed, and you may be able to preserve some value for bondholders or even stockholders.

But let it go on, and on, and on... all you do is make a bunch of bankers fat and happy, while screwing all the people who invested in your plan, and believed in you. That is what Cartwright and Kelly did by juggling the books all these years rather than admit failure.

What's most astounding is that the Board of Directors did not act much, much sooner -- and that in the absence of board action, that some form of shareholder revolt did not take place. After all, insiders do not own a controlling interest in the company. This brings back the old "conspiracy" approach that some of us have pondered -- that somebody, somewhere, owns a bunch of this stock, and for reasons we can't figure out, does not care if the stock loses value -- presumably because that entity has a bigger financial interest in some other aspect of the company.

In any case, I don't see any signs that this board has been moving this way. One suspects that the recent BONY lawsuit might have gotten the board's attention, since the company not only lost the suit, but had to waste money on legal fees in what was clearly a futile effort.

Stephen continues: I don't imagine that there's a tremendously long line of talented executives who want this job and are willing to possibly tarnish their reputation by being the last captain of record on a ship that's long since hit an iceberg.

I agree with that, although it's not a matter of reputation -- I think it's a matter of 1) remuneration and 2) chances for success. Calpine can't offer much of either. Talented executives don't mind a challenge as long as they stand a chance of success. But Calpine management stood by as the company died and started to decompose, rather than getting out of the way while the patient was still alive. So it seems to me that the executive search now is like looking for a mortician rather than looking for a doctor.

Given that the official statement on the management changes was exceptionally terse, there's not much to do but speculate at this point.

Terse is a signal that this decision was abrupt and acrimonious. I suspect we will get more dirt as time goes by.

Certainly, Calpine has to make changes if it's going to survive, and it is not out of line to speculate as to whether the now-former CEO was an obstacle to more radical moves. Founders often have a much different view of their company than outside administrators do, and it's not impossible to think that he was opposed to considering drastic options like bankruptcy or the outright sale of the entire company.

There was never a chance of somebody buying this company once the debt got out of hand. Most of the assets were collateralized so there was not much there to buy. But I agree with Stephen, as does the analyst at Bok, that Cartwright has no doubt been an impediment all along.

Remember, this was a management team that only relatively recently acknowledged the need to sell off assets to pay down the substantial debt burden.

That's inaccurate. They've been selling off assets for at least 2-3 years. Early on, they sold off some of their longterm contracts in California. They sold off a Canadian power plant. The big "debt reduction plan" of 2005 was nothing new -- it was just the old plan, repackaged.

...While I'm sure speculators will still flock to these shares in the hopes of a profitable trade, those looking to make investments in the space would do well to wait for a little clarity on Calpine's new direction and may instead want to take a look at the likes of NRG Energy (NYSE: NRG) or Dynegy (NYSE: DYN) in the meantime.

Calpine has not been an investable stock for about three years (that's about how long it has been since I owned any). That was when the pattern of mismanagement and repeatedly missed guidance started becoming blatantly obvious. A lot of people have made money trading around this stock, as it was swinging 5 and 10% day in and day out. But that should be enough signal to "investors" to RUN AWAY, RUN AWAY.

That's just my view, anyway.
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