Constellation Energy Corp. (CEG) shares ended Friday at $254.83, a decline of 3.7% from the prior close, as the stock continued to trade well below the $287.75 price listed in its May 29 prospectus supplement. The drop came despite a favorable regulatory decision from the Federal Energy Regulatory Commission, which granted a waiver allowing the company to transfer grid rights from its Eddystone gas plant to the former Three Mile Island nuclear site in Pennsylvania. This waiver is a critical step in Constellation's plan to restart the plant, now renamed the Crane Clean Energy Center, to power Microsoft data centers.
Market Headwinds and Share Offering
The stock came under pressure after a secondary offering announced on June 1, in which shareholders planned to sell 11 million shares at $281 each. The offering, which did not involve new shares or provide cash to the company, was completed on June 2. Constellation also used the opportunity to buy back 2 million shares from the underwriters, spending approximately $558 million. About $3.5 billion remains available under its buyback plan. Underwriters have a 30-day option to purchase up to 1.35 million additional shares from the sellers. The stock's slide was exacerbated by a broader market sell-off on Friday, triggered by a hot U.S. jobs report that fueled expectations the Federal Reserve will keep interest rates higher for longer. The Dow Jones Industrial Average fell 1.35%, the S&P 500 dropped 2.64%, and the Nasdaq Composite slid 4.18%.
Nuclear Power and AI Data Center Demand
Constellation, the largest U.S. nuclear operator with about 55 gigawatts of generating capacity and serving roughly 2.5 million customer accounts, is a key example for traders betting on surging electricity demand from AI data centers. The company's Three Mile Island restart plan is seen as a potential bellwether for the nuclear power renaissance. However, no fully closed U.S. nuclear plant has ever restarted, making the outcome uncertain. Chief Executive Joe Dominguez has dismissed concerns about potential delays beyond 2031, but execution risks remain. PJM Interconnection, the grid operator, has flagged required transmission upgrades that could push the project past the company's target date.
Broader Sector Pressure
Constellation was not alone in its decline. Shares of other independent power producers also fell on Friday, with Vistra dropping 3.2% and NRG Energy slipping 3.1%. The sector has seen significant investor inflows on expectations of rising electricity demand, but Friday's sell-off highlighted the vulnerability of these stocks to macro headwinds. Ryan Detrick, chief market strategist at Carson Group, described the market drop as “the dam breaking” after weeks of resilience, while Wells Fargo’s Ohsung Kwon attributed the decline more to positioning than fundamentals.
Key Events Ahead
Investors now have a weekend to digest the combination of new stock supply, rate concerns, and nuclear project risks before trading resumes on Monday. Key focus points include the $281 offering price, whether underwriters exercise their option to purchase additional shares, and any updates from PJM or Constellation regarding the Crane project schedule. A lock-up on shares issued during Constellation’s Calpine deal is set to expire in two stages, with half coming off on June 30, 2026, and the remainder on June 30, 2027. This could add further supply pressure on the stock.
Outlook
The coming week will be critical for CEG as traders assess whether the recent dip represents a buying opportunity or a warning sign. While the regulatory win for Three Mile Island is a positive catalyst, the overhang from the shareholder offering, macro headwinds from rising interest rates, and execution risks for the crane project may continue to weigh on the stock. Without a clear catalyst from nuclear headlines alone, CEG could struggle to recover its lost ground.
