PG&E Corp. stock cratered Monday after the company said it will file for Chapter 11 bankruptcy protection amid the financial anguish stemming from its part in helping spark a wave of historic wildfires in California.
Shares of the company plunged 52 percent to $8.38 per share Monday, one day after the company said Chief Executive Geisha Williams was stepping down. The stock has lost more than 80 percent of its value over the last three months. The market value of the company has declined more than $30 billion to about $4.7 billion from a peak over $36 billion in 2017, a loss equivalent to the size of eBay.
Decline in PG&E's Market Value
The company provided official 15-day advance notice that it and its wholly owned subsidiary, Pacific Gas and Electric, intend to file petitions to reorganize under Chapter 11 of the U.S. Bankruptcy Code on or about Jan. 29.
The company, California's largest investor-owned utility, has 16 million customers across a 70,000-square-mile service area in Northern and Central California. There was some speculation that PG&E was bluffing in order to force aid from California. CNBC's David Faber said that sources told him that is not the case.
PG&E faces at least $30 billion in potential liability costs stemming from wildfires in 2017 and 2018, many allegedly started by the company's equipment, that have led state officials to doubt the safety of the company's electric distribution system.
Investigators have already determined PG&E's equipment liable in at least 17 major wildfires in 2017. State investigators are still working to determine if the company's equipment was partly responsible for November's Camp Fire, which killed at least 86 people and destroyed about 14,000 homes, making it the state's deadliest fire.