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PG&E: Stomach-Churning Turbulence As Bankruptcy Plans Commence

|Includes: PG&E Corporation (PCG)
Summary

PG&E's (PCG) shares have declined as much as 89.7% since September’s $49.42 high in the wake of the news and speculation of their association with the California wildfires.

Shares opened higher (+17.6%) at $8.27 today due to a shareholder’s appeal in an open letter to PCG’s board.

Shares sharply dropped intraday, erased all of the day's eye-opening gain, and closed at $6.36 (-9.9%).

Shorts saw the plea from BlueMountain Capital Management as non-news and longs took the bounce as a flight to safety.

PG&E (PCG) was found to have falsified thousands of safety records between 2012 and 2017 and may face upwards of $30 billion in liabilities and penalties in the wake of the California wildfires. The company announced its plans to file for Chapter 11 bankruptcy by the end of this month. PG&E ex-CEO announced her resignation Sunday, collecting $2.5 million in severance pay on her way out the door. Significant questions remain whether the company can reemerge from bankruptcy as it had after its 2001 bankruptcy.

BlueMountain Capital Management owns a 0.83% stake in the company. Today’s appeal letter can be found here.

Disclosure: I/we have no positions in any stocks mentioned, but may initiate a short position in PCG over the next 72 hours.