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Exelon Stock Price Has ‘Plunged.’ Its Value Hasn’t Changed.

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A hazardous radiation warning sign is displayed at the reactor building of the Exelon Peach Bottom Atomic Power Station in Delta Pennsylvania.
Melissa Lyttle/Bloomberg

The price of Exelon stock was more than 25% lower on Wednesday after the company announced it had completed the separation of Constellation Energy , its former power generation and competitive energy business. Investors, however, haven’t lost nearly that much.

Exelon’s (ticker: EXC) transmission and distribution utility business will continue to trade on Nasdaq under the ticker “EXC,” while Constellation will begin regular trading on Wednesday under the symbol “CEG.”

Current Exelon shareholders will retain their current shares of Exelon stock, and also receive one share of Constellation common stock for every three shares of Exelon common stock held at close of business on Jan. 20. The transaction is tax-free to Exelon and its shareholders.

So while Exelon was down 26% to $42.62 on Wednesday, from $57.83, Constellation Energy Group was up 8% to $53.75. Add one-third of $53.75 to Exelon’s price to account for the one share of Constellation investors got for every three of Exelon, and the total would be over $60 a share. The upshot: While the price of the stock is 26% lower, investors are doing just fine.

Exelon serves more than 10 million customers across a large, mainly urban, service area in Delaware, the District of Columbia, Illinois, Maryland, New Jersey, and Pennsylvania. Exelon announced the separation of Constellation in Feb. 2021.

“With the successful completion of our separation, we step forward in a strong position to serve customer needs, drive growth and social equity in the communities we serve, and deliver sustainable value as our industry continues to evolve,” said Christopher M. Crane, president and CEO of Exelon, in a press release.

The market seems to agree.

Write to Sabrina Escobar at sabrina.escobar@barrons.com

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