Some of the biggest names in the hedge-fund industry may have gotten whacked by betting on PG&E at exactly the wrong time

REUTERS/Gene Blevins

Firefighters work as a raging brush fire pushing towards the coast destroys trailers and motorhomes in Camarillo

• Pacific Gas and Electric Company, California's biggest utility provider, has seen its value plunge by 80% after last November's deadly California wildfire.
• The utility on Monday said it intends to file bankruptcy petitions at the end of the month to reorganize under Chapter 11.
• Eight hedge funds snapped up shares in the third quarter - before the wildfire broke out.
• Including Monday's loss, those eight firms would have lost $1.8 billion over the past three months if they held on to their positions, according to Markets Insider's calculations.

Pacific Gas and Electric Company (PG&E), California's biggest utility provider, has seen its value plunge after last November's wildfire, the deadliest and most destructive in California history. And eight hedge funds, which loaded up on PG&E shares in the third quarter, could be have lost billions as a result.

The past three months have been a tough time for PG&E:

• On November 8, the deadliest and most destructive wildfire in California history broke out. PG&E said it was having trouble with its transmission lines when the blaze erupted, and that it may be responsible.
• In mid-November, people who lost their homes in the fire sued the company, alleging it was a "direct and legal result of the negligence, carelessness, recklessness, and/or unlawfulness."
• A month later, The California Public Utilities Commission opened a proceeding into the company falsifying safety documents for natural gas pipelines between 2012 and 2017.
• PG&E announced on January 4 that its board of directors would review the company's management, finances, governance, and structural options, prompting media to speculate that it was considering filing for bankruptcy protection, as it feared a massive charge related to billions in costs associated with the wildfire.
• All the bad news led the credit-rating agency Standard and Poor's to downgrade the PG&E to junk last Tuesday.
• And things have gone from bad to worse this week. On Monday, PG&E tanked 48% to $9.04 a share after the company said it intends to file bankruptcy petitions at the end of the month to reorganize under Chapter 11. The utility is also searching for a new CEO following the departure of its previous executive leader Geisha William.