(Reuters) -Hawaiian Electric Industries' shares plunged nearly 40% to a 13-year low in early trading on Monday amid growing scrutiny over whether the utility company's equipment played any role in the deadly wildfires that burnt through the coastal Maui town of Lahaina.
Shares of the company hit $18.70, the lowest level since February 2010, just moments after the opening bell, after it was hit with two lawsuits by residents of the state who claim it is responsible for the wildfires that killed at least 96 people.
Hawaiian Electric was last trading down 35% at $20.90.
The cause of the fire remains under investigation. Hawaiian Electric did not immediately respond to a request for comment on Monday. On Friday, before the lawsuits were filed, the company said it is working with the county to investigate what happened.
"There's an uncertainty that the cause of the fires in Maui may be attributable to Hawaiian Electric. That's not yet proven, so there's the fear in the market. It's a 'shoot first and ask questions later' type of situation," Thomas Hayes, chair at Great Hill Capital, said of investors.
A Washington Post report over the weekend raised questions over whether Hawaiian Electric, which owns utility Maui Electric, did not take sufficient safety measures amid warnings days before the fires broke out that wind gusts would trigger dangerous fire conditions.
The proposed class action lawsuits were filed on Saturday in state courts and seek to represent thousands of Hawaii residents affected by the devastating fires that left thousands homeless and Lahaina in ruins.
Lahaina residents in one of the lawsuits claimed Hawaiian Electric is responsible for the fires after failing to shut off power lines despite warnings from the National Weather Service that high winds could blow those lines down and spark fast-spreading wildfires.
"By failing to shut off the power during these dangerous fire conditions, defendants caused loss of life, serious injuries, destruction of hundreds of homes and businesses, displacement of thousands of people, and damage to many of Hawaii‘s historic and cultural sites," the plaintiffs said in the lawsuit, which raises gross negligence and private nuisance claims, among others.
Hawaiian Electric Vice President Jim Kelly told CNN Sunday that the company does not comment on pending litigation.
“At this early stage, the cause of the fire has not been determined and we will work with the state and county as they conduct their review,” Kelly told CNN. He added that Hawaiian Electric does not have a formal shut-off program and precautionary shut-offs have to be arranged with first responders, CNN reported.
The scrutiny caused Wells Fargo and Morningstar to cut their price targets for Hawaiian Electric.
Morningstar strategist Andrew Bischof said he was lowering his fair value estimate for Hawaiian Electric Industries to $23 per share from $34 due to the reports. Wells cut its price target to $25 from $35.
"While it remains unclear if any of HE's equipment directly caused any of the wildfires, we believe it prudent to account for the risk," Wells Fargo wrote.
(Reporting by Shreyashi Sanyal, Clark Mindock in New York in Bengaluru, Chibuike Oguh in New York and Shristi Achar; additional reporting by Brendan O'Brien; Editing by Michelle Price, Lisa Shumaker and Alexia Garamfalvi)