Raymond,
I'm sorry if I haven't been posting as much lately - unfortunately I have been keeping fairly busy on personal matters but I have to object to your last statement:
"GS is looking to do some underwriting business with CPN. Other than that, this jibberish is meaningless."
Goldman clearly has a bias. I was an investment banker not too long ago and I am cognizant of the biases - but for what it is worth Goldman was one of the better sell side firms when it came to research. So while yes, it is prudent to recognize the bias, just as we all have our own biases in either holding or selling short the stock or making headlines, it is equally if not more prudent to recognize arguments for what they are and dissect them at face value.
The market overreacts. There are more forces than simply Eavis at play -- and the short term reactions of the market are no indication of what is "right". Clearly, the market did not take into consideration Eavis's last article or it would have pummelled it further into the ground. So does that mean that Eavis is a fool? (Personally I think he either has his own agenda or is seeking only self gratification - either way, I believe he is wrong.)
The bottom line is that Calpine is a low cost if not the low cost producer in the markets it operates. The industry events have been industry events -- ie the weather, Enron, recession, etc.. These things will happen. Calpine clearly has the asset base, clearly has the cash flow potential and clearly has people willing to give it money. And as a matter of valuation, if the spark spreads ever begin to rebound from some of their historical lows, the profits will flow and the stock will rise. Frankly, I find it puzzling what all the fuss is about.
Clement |
