Why Shares of PG&E Are Falling Today
Shares of PG&E (NYSE: PCG) have had a strong run of late on growing investor optimism that the stock would retain some of its value as part of the bankrupt utility company's restructuring plan. That optimism was dealt a blow over the weekend, however, after California Governor Gavin Newsom voiced his objection to a company plan to compensate wildfire victims that is key to its exit. Shares of PG&E traded down more than 12% on Monday morning as a result.
PG&E entered bankruptcy nearly a year ago to manage an estimated $30 billion in liabilities stemming from 2017 and 2018 wildfires. From the start, the company has hoped to reorganize in such a way that its equity retains some value. That plan was thrown into question after the court, in October, allowed creditors to file competing plans, but a deal reached earlier this month on compensation for victims gave PG&E a powerful backer of its plan against rivals and raised investor hopes for recovery.
Image source: Getty Images.
Source Fool.com
