Preemptive move for being found liable. They know they started at least one of the fires.

To big to fail? I see the Gov has authorized them issuing bonds based on surcharges to users. Do users have anywhere else to go?

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They constantly try to escape from the darkness outside and within
Dreaming of systems so perfect that no one will need to be good T.S. Eliot

they had 1.4B of insurance coverage? doesn't that seem sort of low given potential damage of a fire for which they could be held liable..?

No. It's a regulated utility.

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blog

Is it kind of like a big bank in 2007 where people maybe get fired but nobody is ultimately held responsible? I guess the other question is there are fires all over California and transformers occasionally do set fires when you have thousands of them is it inevitable that at some point one will set a fire. We had a transformer fire down the street just the other day.

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They constantly try to escape from the darkness outside and within
Dreaming of systems so perfect that no one will need to be good T.S. Eliot

Not sure how it works with PG&E but usually regulated utilities agree to maintenance practices and costs with the state and those costs are past through to customers 100%. Given how much fires have been a problem, you'd think there would have been a lot of discussion with the state around fire prevention and if the state said those practices/costs were sufficient, PGE might not be liable.

And what makes that number worse is that a huge number of fires are caused by utilities. So it isn't like they had no warning.

Many fires in recent years have been caused by downed power lines serving California’s utilities. State officials have determined that electrical equipment owned by PG&E, including power lines and poles, was responsible for at least 17 of 21 major fires in Northern California last fall. In eight of those cases, they referred the findings to prosecutors over possible violations of state law.


https://www.nytimes.com/2018/11/14/business/energy-environment/california-fire-utilities.html

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I'm beginning to think that we are much more fucked than I thought.

If the wind blew a tree branch onto a power line, and it fell down and started a fire, wouldn't the owner of the tree be just a liable as the owner of the power line?

BOA analyst says fears of bankruptcy are overstated

"03:58 PM EST, 11/15/2018 (MT Newswires) -- BofA/Merrill Lynch has slashed its price target on PG&E Corp.(PCG) to $50 from $63 while retaining its buy rating, saying recent stock weakness is overdone and bankruptcy concerns are overstated, while expecting a $6 per share impact from the Camp Fire assuming a pre-tax $10 billion liability."

it's currently trading around $18..... it's takes balls to give this a $50 price target.

Edit to add:
Morgan Stanley cuts it to Neutral -price target cut to $31 from $67.
Mizuho lowered their price target on PG&E(PCG) shares to $27 from $48, representing 35% upside over current share prices.

Analysts like that are straight-up sell-side whores. They don’t care if retail investors survive or even make money. They just want to drum up demand so that institutional sellers can dump shares.

Bankruptcy fears aren’t overstated. PG&E has cash flow problems before the fires: underfunded pensions, debt rolling over in an illiquid market, and a vicious circle of rising utility rates and falling utility demand.

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War is god

When the zombie apocalypse comes, I'm mounting that thing horizontally on the front of my bug-out vehicle.

Good call, but I thought they would drag it out for another 6 months or so.

How did you do on your PUTs?
Pre-market it’s currently down 9 to 8.5


“PG&E Prepares to Enter Chapter 11 Bankruptcy Protection

The Wall Street Journal The Wall Street JournalJanuary 14, 2019
Corp. said it plans to file petitions to voluntarily reorganize under Chapter 11 bankruptcy proceedings, a day after the company’s CEO stepped down over the financial fallout spurred by its role in helping spark the California wildfires. The company and its wholly owned subsidiary, Pacific Gas & Electric Co., said they plan to file a petition Jan. 29, though companies are required by law to give a 15-day advance notice to California state of its intention to file a Chapter 11 petition. It said it expects the reorganization to support its liabilities resulting from the 2017 and 2018 Northern California wildfires.”

No puts for me. I've been naked short the stock since March of last year as part of a broad long/short trade (long high quality balance sheet stocks, short low quality balance sheet stocks). Around that time two things happened in quick succession that made me rethink my own investments (which had previously been primarily in bank preferreds and various closed end funds). First, the yield on the two-year was higher than the dividend on the S&P (historically that hasn't had any meaning but I had my own rationale as to why it meant something this time... too long to type out atm). Second, a friend of mine at JPM mentioned to me over dinner that ~10% of the S&P has to borrow just to service their debt and that if bond markets moved at all unfavorably they would be effectively bankrupt. This was part of a broader conversation about stock buybacks and how indebted U.S. corporations had become.

My long/short is only worth ~10% of my portfolio (and PCG is a tiny fraction of that... still a nice move to capture). I'm mostly hiding in the two-year and bank preferreds.