Bad Math at Calpine Adds Up to Sell

Calpine(CPN Quote) just keeps giving investors more reasons to sell.

The latest drama for the stock came Thursday, when shares of Calpine were halted at 3:15 p.m. EST. Investors were kept on the edges of their chairs until nearly 8 p.m., when Calpine put out a press release explaining the reason for the halt: Turns out the company didn't calculate its third-quarter EBITDA number correctly in its Thursday morning earnings release. Also, Calpine miscalculated its second-quarter EBITDA results as well, leading to a reduction of $106.2 million in reported EBITDA results.

But the overstatement in EBITDA (earnings before interest, taxes, depreciation and amortization) due to the inclusion of one-time gains from asset sales was rather obvious in the original press release, as I pointed out Thursday morning. Calpine now reports the number is actually closer to $380 million, a far cry from the $516 million it first reported. And at $379.6 million, the company is about $1 million shy of its quarterly interest expense of $381 million. ...