The Five Dumbest Things on Wall Street This Week

5. Millrace

Calpine (CPN) investors are on edge lately. This week the stock got routed after the company took the unheard-of step of hiring some lawyers.

On Tuesday the New York Post reported that the cash-strapped San Jose, Calif., power company had hired a high-profile restructuring team from Kirkland & Ellis. The Post said the hiring was probably another step in the company's legal wrangling with creditors and didn't necessarily point to an imminent bankruptcy filing. Even so, the news knocked 16% off Calpine's shares in heavy trading.

So Tuesday afternoon, Calpine -- a favorite subject of TheStreet.com's Stocks Under $10's Will Gabrielski, who has zeroed in on its massive debt load and limited liquidity in his RealMoney.com columns -- stepped in to explain that it had been working with Kirkland for some time and to assure investors that a Chapter 11 filing wasn't imminent. "While it is not Calpine's policy to respond to market rumors or discuss our outside counsel, we feel compelled to comment today to quell market rumors that may be placing unwarranted pressure on Calpine's equity and bond securities," Calpine said.

"There was a lot of innuendo" surrounding Tuesday's story, a spokeswoman adds, pointing to the stock's volatility that day. "The concern was over Chapter 11, and the nature of what we were working with Kirkland about."

Judging by the stock's failure to bounce much after Tuesday's comments, it looks like Calpine may yet have a lot more rumors to quell.

Dumb-o-Meter score: 72. On the bright side, at least the rumor mill is energy-efficient.

>To order reprints of this article, click here: Reprints