PG&E Stock Sinks To 6-Month Low As LA Wildfires Likely Among California’s Costliest, But Retail Shows No Panic

California utility PG&E Corp. (PCG) shares fell by more than 10% in mid-day trade on Friday, hitting their lowest levels since July, as the wildfires in Los Angeles continued to spread.

Moody's insurance analysts dub the blaze 'among the most costly wildfires' in California history.

“It will take weeks or months to determine the magnitude of the insured damages, but the Los Angeles wildfires are likely among the most costly wildfires in the state's history,” analysts said in a note Thursday.

Authorities haven’t determined the cause of the Eaton wildfire or the other major blazes burning in Los Angeles. However, reports indicate that the wildfires are not located in PG&E’s service territory.

However, PG&E has a history of wildfire-related liabilities, with over $30 billion in legal claims tied to previous fires that led to its 2019 Chapter 11 bankruptcy — termed "the first climate change bankruptcy" by Harvard researchers. 

The state subsequently established a $21-billion utility fire insurance fund to shield California's investor-owned utilities from catastrophic fire-related financial risks.

PG&E Corp. Sentiment and Message Volume on Jan.10 as of 1:25 p.m. ET | Source: Stocktwits

On Stocktwits, retail sentiment dimmed to ‘bullish’ from ‘extremely bullish’ a day ago as chatter remained at ‘extremely high’ levels. 

Some users pointed out that the current wildfires were not in PG&E’s territory, while other highlighted the opportunity to buy the stock at a discount.

PG&E stock is now down 4% over the past year, with a 13% decline since the onset of the wildfires.

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