PG&E (PCG), which is seeking bankruptcy protection under Chapter 11, had one of the best weeks of the year. The stock rose almost 20% last week after Governor Newsom suggested having a wildfire fund in order to finance wildfire-related liabilities, according to the Wall Street Journal. Peer utilities in California also rose due to the news. Sempra Energy (SRE) stock rose 1.3%, while Edison International (EIX) stock rose more than 5% last week.
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.
According to Bloomberg, asset management company BlueMountain Capital Management might replace some of PG&E’s board members. BlueMountain holds 2.5% of PG&E’s total outstanding shares. BlueMountain objected to PG&E’s bankruptcy proceedings through a series of open letters to the company’s management and shareholders.
Stock continues to climb
PG&E filed for Chapter 11 bankruptcy protection in late January. Investors seem to have faith in the stock. PG&E has almost doubled since the company filed for bankruptcy. Broader utilities (XLU) rose 10% during this period.
PG&E stock is trading in the overbought zone with its RSI at 83. RSI levels at extremes indicate a reversal in the stock’s direction. Edison International’s RSI was 76 at the closing last week.
PG&E is facing ~$30 billion in potential liabilities related to wildfires in 2017 and 2018. “Camp Fire,” the deadliest fire in California’s history, killed 86 people in November.