Exelon Extends Deadline in NRG Bid

The success of Exelon's tender offer suggests that NRG's shareholders and management team had wildly differing outlooks about the investment climate and the economy when Exelon offered each side an easy way to cut and run from their positions.

Last summer's slide in energy commodity prices was almost entirely driven by falling demand by way of a violent deceleration in economic activity around the globe. However, the supply and demand fundamentals of energy were still very tight, especially when analyzed three, five and 10 years out.

Although reports of blistering demand for energy from China and other emerging markets dominated energy discussion boards as the energy morphed into an irrational bubble, the steep slope of oil's trajectory was actually caused by a shock on the supply side more than the demand side.

Because the fundamentals of energy supply last October were nearly identical to supply fundamentals early last spring, NRG's executives likely don't want to sell a valuable energy company at the bottom of the economic cycle. However, the picture probably didn't look as rosy for those NRG stockholders who watched their investments shrink by 66% in fewer than six months.

NRG shares closed Wednesday's trading session down 5% to $23.37, and Exelon closed down 3.8% to $55.22.