SAN FRANCISCO — The New York Stock Exchange said Monday it plans to delist Calpine Corp. in a move reflecting Wall Street’s dismay as the debt-plagued power merchant considers bankruptcy.
The decision represents the investment community’s latest snub of a company whose shares have been eroding as its debts and losses mount.
Calpine lost its spot in the Standard & Poor’s 500 late last week after its market value shriveled to less than $310 million — the lowest in the blue-chip stock index.
S&P’s rebuff followed Calpine’s ouster of its chief executive officer and chief financial officer.
The company has been reeling since it lost a key court battle just before Thanksgiving.
A Delaware judge ruled Calpine improperly spent $313 million that had been held in escrow for lenders and last week order the company to repay the money, plus interest, by Jan. 22. The requirement threatens to create a cash crunch so severe that management has acknowledged the company might seek refuge in bankruptcy court.
Calpine hopes to overturn the order with an appeal to the Delaware Supreme Court.
Since the Delaware judge first ruled against the company Nov. 22, Calpine’s shares have plunged below 30 cents — a nearly 90 percent decline that prompted the New York Stock Exchange to cut its ties with the San Jose-based company.
Citing the "abnormally low” price of Calpine’s shares, the exchange said it would suspend trading before Tuesday’s session and then initiate proceeds to delist the company. The shares fell by another 6 cents to close at 22 cents.
Calpine’s shares debuted the NYSE in September 1996 after an initial public offering at a split-adjusted $2. Now, Calpine expects its shares to trade on the OTC Bulletin Board.
The company’s transformation into a penny stock serves as another sobering reminder about how far Calpine has fallen since its shares climbed above $58 during the spring of 2001. Then, Calpine was considered a hot commodity because its profits had soared along with electricity prices.
But Calpine has been struggling financially ever since as lower electricity prices and weakening demand has made it more difficult to pay back the debt accumulated as it built dozens of power plants across the country. The company has lost $926 million since 2003 and ended September with debts of more than $17 billion.
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