What happened 

Shares of PG&E (PCG 2.56%), which owns the utility that serves Northern California, dropped as much as 50.1% in early trading Monday after the firing of its CEO and the revelation of its imminent bankruptcy. They're down 48.8% on the day at 11:40 a.m. EST. 

So what

The board of directors said yesterday that CEO Geisha Williams has left the company and General Counsel John Simon will serve as interim CEO while a search for a new chief executive is conducted. It was when Williams' ouster was announced that reports of a potential bankruptcy started to be reported and those came true today. 

Utility transmission lines at dusk.

Image source: Getty Images.

PG&E hasn't yet filed for bankruptcy, but revealed that it's preparing to do so on or about Jan. 29, 2019. California law requires a 15-day advance notice if a change of control of a company is taking place and that's why there's a long delay in the filing. 

The bankruptcy announcement is a bit surprising given that PG&E had a market cap of nearly $10 billion at the end of last week. But estimates of up to $30 billion in liabilities for wildfires in California appear to be too much to overcome in an environment where the power plant and utility business is becoming less profitable. 

Now what

It's possible that current shareholders could end up owning something after a reorganization, but often shareholders are completely wiped out. That's why I don't think there's any reason to hang on to shares today. It looks as if bankruptcy is imminent, and with the uncertainty that comes with it, investors can find better opportunities with their capital, especially from utilities that aren't facing billions in costs from well-publicized wildfires.

Check out the latest PG&E earnings call transcript.