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California Wildfires Scorch PG&E Stock by 50% in Just 7 Days

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Ryan Smith
Last Updated
  • PG&E stock hovers precariously above its all-time low as the California wildfires continue unabated.
  • The company may have even started two fires unintentionally.
  • With $30 billion in outstanding liabilities, financial prospects are looking grim.

If anyone thought utilities were a safe place for investors to hide, they’d need to think again. Even if the stock market rally is a big fat lie, indices still seem to be the better prospect. Especially in the context of the ongoing California wildfires.

Pacific Gas & Electric Company (NYSE: PCG) stock has been hammered in the last seven days recording a loss of more than 50%. Despite intraday relief on Monday, sellers drove prices back down to finish the session near the lows at $3,78 a share.

PG&E Stock 1 Minute Chart
PG&E is down 50% in less than a week | Source: Yahoo Finance

The long term picture is equally abysmal. PG&E once soared above $70 a share back in September of 2017. In the last two years, however, the natural gas and electricity provider has suffered a 95% loss in market value.

PG&E stock 2-year chart
PG&E stock appears to be heading to zero | Source: Yahoo Finance
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PG&E Unintentionally Adds to the Blaze

The dire news continues this week after the company said on Monday that its own power lines may have actually started two California fires . The result has caused widespread evacuations in Lafayette, roughly 20 miles out of San Francisco.

Despite desperate efforts to contain the problem, the company is finding it increasingly difficult to predict the path of the blaze. Planned power outages did not include an area of the town where the fires began.

Earlier this month CCN.com reported that PG&E was burning approximately $216,000 every hour of its planned power outage. The National Weather Service expects similar conditions for Tuesday and likely into the rest of the week.

National Weather Service fire forecast
Dangerous conditions continue into the week | Source: Twitter 

Heading For Financial Disaster?

Earlier this year the utility giant filed for bankruptcy protection in relation to last year’s deadly Camp Fire. In June PG&E bondholders proposed an exit plan worth up to $30 billion  in the hopes of escaping chapter 11 bankruptcy.

That’s all been thrown out of the window, however, with this latest round of fires. ABC7 News contributor Phil Matier says the company is caught between a rock and a hard place :

“PG&E is in a damned if they do turn off the power, they’re damned if they don’t because they’re responsible for anything that happens with those lines, whether it’s their fault or not.”

He goes on to say:

“You’re talking about $30 billion already and it’s growing every year until the problem is fixed. Basically you’re saying buy something that’s guaranteed not to make money.”

Price is holding in pre-market trading but is likely to tumble further in line with the previous three trading session opens.

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Ryan Smith

Ryan hails from sunny South Africa. He is fascinated with the broken financial system that threatens to destabilize global markets. He has a keen interest in the history and evolution of money and is always trying to understand the bigger economic picture. When not meticulously looking over the charts, he can be found planning his next road trip or running the trails in his the local nature reserve. Gmail 
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