What happened

Shares of PG&E (NYSE:PCG) fell nearly 30% on Monday morning as wildfires continue to blaze across the bankrupt utility's northern California service area. The stock has now lost about half of its value in less than two trading sessions, and lawmakers in California are soliciting outside help to save the company.

So what

PG&E has been operating while in bankruptcy protection since January, attempting to get out from under an estimated $30 billion in wildfire liabilities stemming from the 2018 Camp fire in northern California. The company had hoped to reorganize in such a way that would preserve some of the value in its equity, but the bankruptcy case has been complicated.

Utility transmission lines spread across farmlands.

Image source: Getty Images.

The utility has been targeted by state lawmakers and creditors, including fire victims, who have argued PG&E's plan will not give them full recovery. Earlier this month, the judge overseeing the bankruptcy allowed alternative plans filed by creditors to be considered, a potential blow to equity holders.

In recent days, PG&E's plight has gotten worse as the Kincade Fire burns in Sonoma County north of San Francisco. Last week, the utility told state regulators that one of its transmission towers near where the fire ignited had malfunctioned, raising concerns that PG&E equipment had sparked the fire.

PG&E had cut power to residents as a precaution, creating one of the largest deliberate blackouts in state history and inflaming tensions. The utility has warned the situation could get worse: A new round of wind gusts forecasted for this week could cause more blackouts as soon as Tuesday.

With PG&E's future surrounded in uncertainty, California Governor Gavin Newsom suggested over the weekend that Warren Buffett's Berkshire Hathaway, a frequent investor in utility stocks, should consider making an offer for the utility.

Now what

PG&E's shares currently trade based on sentiment over whether equity holders are likely to see recovery when the company eventually emerges from bankruptcy. It's hard to know for sure, but all of the news coming out of northern California in recent weeks has increased the odds that the shares will be wiped out, and the stock has fallen accordingly.

There is no good argument for long-term investors to buy into PG&E right now. This is a stock best left for speculators who hope to profit on what is likely to be continued volatility as the bankruptcy story plays out.