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PG&E Stock Rose ~20% Last Week

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PG&E

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.

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Board reshuffle

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.

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