GE Sells Yet Another Division
https://www.fool.com/investing/2020/06/02/ge-sells-yet-another-division.aspx
7 replies (most recent on top)
What do you mean “putting them in position to break up the company”? They HAVE BEEN breaking up the company since Barbara Bush was kicked out as CEO. GE is a shadow of it’s former self. It’s already been broken up!
@1vmu+15hssoR2 Finally someone gets it. This has always been the plan. Everything they have been doing is setting them up in a position to breakup company. If had not been for covid-19 it would have happened already. Now they need to cut cost in Aviation and shore up Power to separate them like he did at Danaher,
As Trian has always known, GE is worth more in its pieces than as a whole. This is a long term play by them, first getting representation on the board, replacing Immelt and then placing Kulp at the top.
I guess investors like Trian needed to see a return, and they pushed their stooge Immelt hard for $2.00 EPS. Also, the uppermost GE executives might have seen a temporary bump in the stock price to benefit their own compensation.
In hindsight, GE should have used those GE Capital asset sale proceeds to deleverage the company.
GE Capital, after a great and profitable run in prior years, nearly took the company down during the 2008-2009 crisis. Shrinking it was a good move. However, blowing the proceeds on c-ap like stock buybacks was a colossal blunder. I think GE bought back ~$50 billion in stock north of $20 per share, which today is worth $7.
it won't make a dent. GE is not turning around as it has too much baggage. The ship is continuing to sink even with the changes and will be at the bottom soon. There is no way for it to generate enough cash from continuing operations to stay afloat. Anyone think the mass sell off of Capital (and its cash generators) was a mistake?