Hawaiian Electric utility company sees its stock price plunge 49% after devastating Maui fires

• Hawaiian Electric stock has plunged as much as 49% since the start of the devastating Maui fires.
• The fires broke out last week and killed at least 96 people in what has turned into the deadliest US wildfire in over a century.
• While no cause to the fire has yet been determined, suspicions are growing that Hawaiian Electric equipment may have played a role.

Shares of Hawaiian Electric plunged as much as 41% on Monday and are down 49% since the devastating Maui fires broke out last week.

The Honolulu-based utility company engages in the production, transmission, and distribution of electricity in the islands of Oahu, Hawaii, Maui, Lanai, and Molokai and serves 95% of the state's residents.

The fast-spreading wildfire killed at least 96 people and destroyed or damaged thousands of buildings, making it the deadliest US wildfire in over a century. Factors that likely contributed to the destructive fire include high winds, low levels of rainfall, and dry vegetation.

And while no official cause of the fire has yet been determined, suspicions are growing that Hawaiian Electric may have played a role in either starting or spreading the fire, or both.

Lawyers investigating the cause of the Maui wildfire are now claiming that damaged equipment operated by Hawaii Electric sparked the blaze.

"All evidence, videos, witness accounts, burn progression, and utility equipment remaining points to Hawaiian Electric's equipment being the ignition source of the fire," Mikal Watts told Bloomberg. Watts is a Puerto Rico-based plaintiffs lawyer that has previously won millions of dollars in settlements in wildfire cases.

The ongoing plunge in Hawaiian Electric's stock price is a shoot first and ask questions later scenario similar to prior wildfires that ensnared utility companies, including the plunge in California utility company PG&E's stock after the 2018 Camp Fire, which leveled the town of Paradise.

In an e-mailed statement to Bloomberg, Hawaiian Electric said it doesn't have information on what caused the fires and that it would work with officials to investigate the fire once the immediate emergency has passed.

Lawyers investigating the fire are pointing out that Hawaiian Electric said strong winds had downed electric power lines before the fire started, and that the utility company did not turn off power despite warnings of critical fire conditions.

"While the exact cause of the fire has yet to be determined, some fingers…are already being pointed towards Hawaiian Electric, as we feared, including for not instituting public safety power shutoffs," Wells Fargo said in an analyst note.

If the utility company is found at fault for starting the fire, it could lead to billions of dollars in liabilities that might not be fully covered by the company's insurance policies. PG&E faced a $30 billion fire liability due to fires it started in 2017 and 2018, though those fires were much larger in size than the Maui fire.

"The utility's insurance will provide some protection but Hawaiian Electric has not disclosed the deductibles or limits," Wells Fargo said.