Dark pool trading was detected in PCG stock on February 7, 2020.
The first dark pool order at 4:02 PM worth $17 million, looks like a buy order. The second dark pool trade at 4:11 PM worth $10 million, appears to be a sell order. We are basing these guesses on how PCG stock reacted to the dark pool orders.
Bullish Options Flow
We also detected bullish options flow in PCG stock on February 7, 2020, which supports the idea that most of the dark pool trading in PCG stock was buying.
Bull Call Spreads
Bullish call spreads were detected in PCG stock on February 7, 2020.
A Bull Call debit spread is a long call options spread strategy where you expect the underlying security to increase in value. Within the same expiration, buy a call and sell a higher strike call. Risk is limited to the premium paid (the Max Loss column), which is the difference between what you paid for the long call and short call. Profit is limited to the difference in strike values minus the credit. The bull call strategy succeeds if the underlying security price is above the higher or sold strike at expiration.
What we think is happening is that large players are betting that PG&E will emerge from bankruptcy and so they are buying now on a turnaround play.
The rising large players volume in PCG stock supports this thesis.
On February 2, 2020, PG&E submitted regulatory and court filings outlining the key elements of the company’s updated Chapter 11 Plan of Reorganization.
PG&E submitted testimony in the California Public Utilities Commission Plan of Reorganization proceeding and filed its updated Plan with the Bankruptcy Court. Based on these filings, PG&E remains on track to have its Chapter 11 Plan confirmed by June 30, 2020, the deadline for participating in the state’s new go-forward wildfire fund.
Upon emergence from Chapter 11, PG&E will be a financially stable company positioned to continue prioritizing safe operations and customer focus while meeting California’s energy needs and clean energy goals in a changed climate. As explained in its testimony, PG&E believes its Plan meets both the letter and spirit of Assembly Bill 1054, including being rate neutral on average to customers.
The Plan also addresses concerns the Governor raised in his December 13, 2019, public letter to the company. PG&E appreciates the Governor’s input and is open to further discussions with the Governor’s Office and other stakeholders should they have additional input as the process unfolds. PG&E looks forward to participating fully in the CPUC’s proceeding to review its updated Plan.
Key updated safety, governance, and operational elements of the Plan include:
- Refreshing the Boards of Directors of PG&E Corporation and Pacific Gas and Electric Company so that the Boards will have the necessary expertise and skills to oversee the company post-emergence
- Implementing a plan to regionalize the company’s operations and its infrastructure to enhance the company’s focus on local communities and customers
- Further strengthening PG&E’s corporate governance by appointing an independent safety advisor after the term of the court-appointed Federal Monitor expires
- Establishing a newly expanded role of Chief Risk Officer who will report directly to the PG&E Corporation CEO and have oversight of risks associated with PG&E’s operations
- Establishing a newly expanded role of Chief Safety Officer who will report directly to the PG&E Corporation CEO and have oversight of PG&E’s strategy to further improve public and workforce safety
- Forming an Independent Safety Oversight Committee with non-PG&E employees to provide independent review of the company’s operations, including safety and regulatory compliance, safety leadership, and operational performance
- Committing to enhanced safety metrics and stricter regulatory oversight with escalating enforcement mechanisms
- Reforming executive compensation to further tie it to safety performance
- Assuming all pension obligations, other employee obligations, and collective bargaining agreements with labor unions, and all power purchase agreements and community choice aggregation servicing agreements.
Key updated financial elements of the Plan include:
- Paying value in excess of $25B to wildfire victims through the settlements reached with individual victims, subrogation claimants, and public entities
- Emerging with a financing structure that protects customer rates and positions the company for long term success. This includes saving PG&E’s customers nearly $1B through the previously announced settlement with noteholders and contributing shareholder credits of approximately $8B so that the plan is neutral on average to customers.
On February 3, 2020, Bloomberg’s Mark Chediak reports that California senator Dodd calls PG&E’s reorganization plan ‘unacceptably deficient’. Dodd is a co-author of the state bill that is setting parameters for PG&E to qualify for fire insurance when it emerges from bankruptcty.
On February 4, 2020, J.D. Morris, the energy reporter at the San Francisco Chronicle, tweeted: “PG&E’s bankruptcy judge just approved the company’s settlement deal with bondholders who wanted to take over the company, despite objections from Santa Rosa fire survivor Will Abrams.” Source: https://twitter.com/thejdmorris/status/1224765782766211074