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SAN FRANCISCO (AP) _ Calpine Corp. said Thursday its chief executive officer will sell 2.46 million shares of his company stock this year, a move that threatens to further diminish investors' fading confidence in the once highly regarded power generator.

Chairman Peter Cartwright's planned divestitures involve stock options that will become worthless unless they are redeemed by Dec. 31 this year. Stock options are fixed at a predetermined price and become more valuable if a company's share price rises.

Under a plan designed earlier this month, Cartwright immediately is selling all the options that he exercises this year, a strategy that probably won't inspire optimism about San Jose-based Calpine's prospects this year, said Sean Loren, a Thomson Financial analyst who tracks the stock sales of corporate insiders.

If Cartwright wanted to inspire faith in the company, he would sell just enough shares to cover the income taxes and other expenses on the transaction and hold on to the rest of the stock until market conditions improve, Loren said.

Calpine's stock is suffering from a dramatic decline in power prices and mounting investor concerns about the company's financial strength since the collapse of Enron, once the nation's largest energy trader.

The company's shares fell 40 cents on the New York Stock Exchange on Thursday to close at $7.35 _ a 66 percent drop from its price before Enron's Dec. 2 bankruptcy. Calpine's shares peaked at $58.04 last March.

``The stock is under pressure, so my concern would be why he's selling all the shares right now,'' Loren said.

Cartwright was unavailable for comment Thursday, Calpine spokeswoman Katherine Potter said.

Cartwright, 72, might be selling some of his Calpine stock for estate planning reasons, said industry analyst Thomas Hamlin of Wachovia Securities.

``Some deference should be given to his age,'' Hamlin said. ``You will never find a bigger cheerleader for the company or the industry than Peter Cartwright.''

After all the sales are completed, Cartwright will have 7.67 million other vested options in Calpine stock. Besides his options, Cartwright also owns 172,255 shares of Calpine's stock _ a stake worth $1.27 million as of Thursday.

Calpine isn't disclosing the timing of Cartwright's planned sales, which are being handled by an independent broker. The company said Cartwright exercised and sold the first batch of 57,000 options earlier this month, but didn't disclose the exercise and sales prices.

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On The Net:

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