Hawaiian Electric Industries Inc. (NYSE:HE), a Hawaii-based utility company, has seen its stock plunge to near 40-year lows as it faces scrutiny over its involvement in the Maui wildfires and grapples with mounting financial and legal challenges.
On Thursday, Hawaiian Electric’s stock dropped by a substantial 15.34%, bringing its monthly decline to nearly 70%. This puts the company’s shares at levels not seen since October 1987. The situation has been exacerbated by concerns about its role in the Maui wildfires and reports suggesting the company is in discussions with restructuring advisory firms to address its financial issues.
S&P Global Ratings has responded to these challenges by downgrading Hawaiian Electric to BB- status, a junk rating, and placing it under further watch for potential downgrades. This downgrade reflects the damage caused to the company’s customer base due to the wildfires, as well as the class action lawsuits accusing the company of starting the fires. The wildfires have had a significant impact on Hawaiian Electric’s profitability, leading to a long-term erosion of its financial health.
As the company deals with these setbacks, its shares experienced trading halts on Wednesday and Thursday, highlighting the tumultuous nature of the situation.
The downward trend in Hawaiian Electric’s stock has brought it close to a near four-decade low, which raises concerns for the company. The stock has also broken below the price support represented by the low of $12 in March 2009. The relative strength index (RSI) for the stock has reached historically oversold levels, with the 14-day RSI at 4.90, the 14-week RSI at 13.77, and the 14-month RSI at 22.90, all marking their respective all-time lows.
Looking ahead, the next support level for the stock could be found in the range of $9.80-10, which held strong from November 1984 to November 1985. However, due to the high uncertainty surrounding the company’s future, any potential support levels should be approached with caution.
The situation facing Hawaiian Electric Industries Inc. is a cause for concern, as the company deals with regulatory woes, financial repercussions, and a plummeting stock price. It remains to be seen how the company will navigate these challenges and if it will be able to overcome them in the long run.
