A higher collateral obligation makes the stock riskier to own, Barry Abramson, an analyst with Gamco Investors Inc. in New York, told Bloomberg News.
"No one is alleging that the company did anything deliberate," he said, "but it hurts confidence to see an error that is of this magnitude."
In a separate report issued yesterday, Jefferies & Co. analyst Paul Fremont upgraded Constellation's stock to "hold" from "underperform" and gave it a target price of $71.
But Fremont also said his firm was puzzled by some of Constellation Energy's accounting, including "unexplained adjustments to depreciation," certain cash flow characterizations and unclear market-to-market adjustments.
"We look forward to the company providing answers to accounting questions at its August 28, 2008 analyst meeting in Baltimore," Fremont wrote.
Constellation's stock is down 43 percent this year from a high of $107.13 on Jan. 9.
"I'm scratching my head a little bit at the magnitude," Patterson said.
"It's almost as if, overnight, people have come to the realization that this company is involved in dynamic, volatile financial and energy markets, and they're shocked by the fact. ...
"It's not exactly a news flash."
tricia.bishop@baltsun.com
