PG&E (PCG) stock fell the most among utilities last week, by more than 9%. JPMorgan Chase raised PCG’s price target from $11 to $14 on April 17. The stock rose ~20% in the week prior, following California Governor Newsom’s proposal of a wildfire fund to finance wildfire-related liabilities. PG&E stock has risen ~190% in the last three months, while utilities overall have gained ~8%.
Sign up for Bagels & Stox, our witty take on the top market and investment news, straight to your inbox! Whether you’re a serious investor or just want to be informed, Bagels & Stox will be your favorite email.
High risks pay off
There was severe downward pressure on PG&E stock in January before it filed for Chapter 11 bankruptcy protection. The stock, which touched a multiyear low of ~$5 in mid-January, recovered to ~$24 last week.
According to The Wall Street Journal, Abrams Capital Management, Knighthead Capital Management, and Redwood Capital Management bought PG&E stock during its weakness, and are sitting on a hefty unrealized collective gain of ~$700 million.
PG&E is facing ~$30 billion in liabilities associated with wildfires in 2017 and 2018. November’s Camp Fire, the most devastating fire in California’s history, killed 86 people.