Bankruptcy Buzz Could Bury PG&E Stock

PG&E is facing steep liability charges for its role in deadly California wildfires

Managing Editor
Jan 7, 2019 at 9:20 AM
facebook X logo linkedin


The shares of PG&E Corporation (NYSE:PCG) are down 18.7% in electronic trading, after Reuters reported the California utility company was exploring a bankruptcy filing. The move would be a contingency plan to help manage the costs from insurance liabilities incurred from massive wildfires in November and in 2017. 

Should today's premarket price action pan out, PCG would be dangerously close to its 15-year low of $17.26 hit on Nov. 15. This came in the wake of a massive bear gap, sparked by news the company reported electrical issues to regulators ahead of the deadly Camp and Woolsey wildfires that raged in California. This resulted in a sharp quarterly loss of 48.4%. 

It's not surprising to see that short sellers have flocked to the utility stock. Short interest increased by 40% in the last two reporting periods to 12.71 million shares, the most since October 2014. Nevertheless, this only represents 2.5% of PCG's total available float. These bearish bettors are expected to be sidelined today, though, with the equity likely headed for the short-sale restricted list.

What is a surprise is that the majority of analysts still favor the equity. Of the 12 brokerages in coverage, seven rate it a "strong buy," compared to four "holds," and one "sell." In addition, UBS raised its PCG price target this morning to $29 from $26, and the consensus 12-month price target of $37.67 is a 54% premium to Friday's closing perch of $24.40. A round of bear notes could put more pressure on the shares.

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI