PG&E is tanking after report says it's considering filing for bankruptcy protection
- Pacific Gas & Electric Company (PG&E) is considering bankruptcy protection for some or all of its businesses, according to a report out late Friday.
- The California utility faces billions of dollars of liabilities as a results of wildfires over the past two years.
- Shares were down more than 18% early Monday.
- Watch PG&E trade live.
Pacific Gas & Electric Company (PG&E) was getting hit hard Monday, down more than 18% at $19.93 a share, after a report out late Friday said it was considering filing for bankruptcy protection.
The embattled California utility faces billions of dollars in liabilities as a result of wildfires over the past two years, and could seek protection for some or all of its businesses, Reuters reports, citing people familiar with the matter.
Despite the news, UBS analyst Daniel Ford raised his price target from $26 to $29, saying it assumes PG&E is "not liable for Tubbs and reflects a higher $15.1B net liability ($11.3B prior) for 2017 and 2018 due to the Camp fire but a lower cost of funding (7.5% versus 9.0% WACC)."
PG&E shares have plunged nearly 50% since November 8, when the deadliest and most destructive wildfire in California history broke out. The utility said it was having trouble with its transmission lines when the blaze erupted, and that it may be responsible.
Following the blaze, the company's problems have been piling up.
In mid-November, people who lost their homes in the fire sued the company, alleging it was a "direct and legal result of the negligence, carelessness, recklessness, and/or unlawfulness."
And a month later, The California Public Utilities Commission opened a proceeding into the company falsifying safety documents for natural gas pipelines between 2012 and 2017.
Also in December, PG&E requested a 12% rate hike in 2020 to help fund a community wildfire safety program, insurance liabilities, and core gas and electric operations.
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