A reverse stock split is unusual for a company as large a General Electric (ticker: General Electric ). And a reverse split isn’t typically seen as a positive factor by investors, although a traditional split, such as Tesla ‘s (TSLA) 2020 move giving investors five shares for each one they had, can improve sentiment.
Reverse splits can have the opposite impact on investor sentiment. In the case of GE, however, the pain has already been felt. Shares were once about $60 each. The stock has lost investors about 14% a year on average for the past five years. Over the past 10, shares have a negative return as well. The S&P 500, for comparison, has earned investors about 14% and 17% a year on average over the past five and 10 years, respectively.