Green Dot Corporation, a Pasadena-based financial technology and bank holding company, will now join Standard and Poor’s MidCap 400 as a result of Pacific Gas and Electric Company’s planned bankruptcy filing.
PG&E announced Monday its intent to file for Chapter 11 bankruptcy protection, as a result of the “devastating and unprecedented Northern California wildfires of 2017 and 2018.”
The company said the fires “have had a profound impact on our customers and their communities.” It said it does not expect any impact of the Chapter 11 process to its natural gas or electric service to customers.
PG&E filed the notice with the Securities and Exchange Commission as required by California law. It said it intends to file for bankruptcy protection on or about January 29.
As a consequence of the filing, PG&E will no longer be eligible for continued inclusion in the S&P 500 and will be replaced by healthcare equipment maker Teleflex Inc. on Friday. Green Dot Corporation will then replace Teleflex in the S&P MidCap 400 index, S&P Global said.
Green Dot will in turn be replaced by Mercer International Inc. in the S&P SmallCap 600 prior to the open of trading on Friday.
The S&P MidCap 400 Index, more commonly known as the S&P 400, is a stock market index from S&P Dow Jones Indices. The index serves as a barometer for the U.S. mid-cap equities sector and is the most widely followed mid-cap index in existence.
To be included in the S&P 400, a stock must have a total market capitalization that ranges from $1.4 billion to $5.9 billion at the time of addition to the index. As of 29 December 2017, the median market cap was almost $4.1 billion, with the market cap of the largest company in the index at more than $13.1 billion and the smallest company at $626 million. The index’s market cap covers nearly seven percent of the total US stock market. The index was launched on June 19, 1991.
In Monday’s announcement, PG&E said it faces “extensive litigation and significant potential liabilities resulting from these wildfires.”
“It is clear that a solution is needed that enables the continued safe delivery of natural gas and electric service to our customers and supports the orderly, fair and expeditious resolution of PG&E’s potential liabilities resulting from the recent wildfires,” the announcement said. “We have determined that a Chapter 11 reorganization is the only viable option for meeting these goals. PG&E is not going out of business.”
Green Dot Corporation is recognized as the world’s largest prepaid debit card company by market capitalization. Green Dot is also a payments platform company and is the technology platform used by Apple Pay Cash, Uber, and Intuit.
Financial services industry pioneer Steve Streit founded Green Dot in 1999 as a prepaid debit card for teenagers to shop online. In 2001, the company pivoted to serving the “unbanked” and “underbanked” communities.
The company went public in 2010 with a valuation of $2 billion. Since its inception, Green Dot has acquired a number companies in the mobile, financial, and tax industries including Loopt, AccountNow, AchieveCard, UniRush, and TPG.