Hawaiian Electric Industries Inc. shares are headed to the worst weekly drop in at least four decades on concern it may be responsible for the fires that ravaged the island of Maui, with Wells Fargo’s analyst warning the possible liabilities could be large enough to wipe out the value of its utility arm.
The stock has tumbled nearly 60% this week, the steepest decline in data going back to 1980, and ended Thursday at a 36-year low. The selloff was driven by concern among investors that the company’s power-equipment may have started the blaze, though no official cause has yet been determined.
“We believe it is prudent to assume the utility is worth $0/sh as property damage, loss of life plus pain & suffering, and economic losses are likely well into the billions of dollars, far exceeding the utility’s pre-wildfire equity value,” Reeder told clients in a note. Hawaiian Electric pared some of the drop Friday, rising as much as 14% after the company said in a filing that it’s seeking advice from experts. Hawaii Electric also said there’s no precedent in Hawaii for the application of the type of legal principle like the one that figured in the California utility’s downfall.
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