Ge used to be the company with the highest market capitalization in the United States, and now its share price is only a fraction of the past.
once powerful Ge (8.02, -0.15, -1.84%) is trying to avoid becoming a junk stock. Its share price has become a fraction of what it used to be, and its bonds are now trading like junk bonds. On Friday, General Electric fell 1.84% to $8.02. This has put pressure on Larry cup, the new CEO, to quickly raise cash and reduce debt to avoid his debt rating falling further to sub investment grade junk
thomas tzitzouris, director of fixed income research at strategas, said: "when the market starts pricing your stock as junk, the time to clean up such stocks before it becomes junk is very limited. Whether their plans are feasible or not, their time is running out."According to tzitzouris, Ge is not even close to getting a junk rating to some extent, but it must prove that it is qualified to maintain its investment grade. After S & P downgraded its rating to bbb+ last month, the company aims to regain a rating. If Ge becomes a "fallen angel", its debt service cost will rise, and both stocks and bonds will face a new round of selling pressure
number 4. Introduction to the software function of liquid crystal material testing machine: it is shown that the market value of General Electric has fallen to a level slightly below $70billion, about $300billion lower than the level in 2005. In 2005, General Electric was the most valuable company in the United States
six weeks ago, Karp, who was the CEO of Danaher, a technology group, replaced John Flannery. Flannery has been considered too slow to solve problems since he took over as CEO Jeff Immelt for a long time
this week, Ge should reassemble the parts according to the design requirements at this time; Sold its $3.7 billion stake in Baker Hughes, an oilfield services company. On Friday, Ge took another step towards the previously announced $25billion GE Capital Asset Impairment plan, selling a $1.5 billion medical equipment financial portfolio to TIAA bank
but strategists said that GE needs to continue to show results, and there are still too many problems to be solved
stock analysts at Goldman Sachs (202.12, -1.62, -0.80%) lowered the target price of GE's stock from $12 to $9 on Friday, and said that in view of GE's leverage and tail risks related to GE Capital, they believed that GE's share price was not appropriate
Ge shares fell more than 5% on Friday, falling below $8 to $7.73. Goldman Sachs analysts said it was unclear how much capital Ge needed. They said that by 2020, the funding gap could be as high as $20billion, which needs to be filled through asset sales and capital injection from the parent company
Goldman Sachs analysts also said that the sales of GE's power business continued to decline, and they expected another decline in 2019
these are doubts surrounding GE's stock and debt
"what investors usually don't like is uncertainty and lack of direction. We are going through this period." Jonathan duensing, head of amondi pioneer investment grade corporate bonds, said, "the clearer the management team is, the more actions can be taken. This will start to really repair the situation, not only for the enterprise itself, but also from the perspective of confidence. The current situation is largely due to the shaken confidence of investors."
Karp said in an interview this week that he felt the "urgency" of reducing the company's leverage and would achieve this by selling assets. He said that the company's healthcare business may carry out an IPO
Karp said in an interview on Monday, "we have nothing more important than reducing leverage."
General Electric has about $115billion in debt. When it was one of the few blue chips with coveted AAA rating, debt of this size could easily accumulate. But Ge lost the crown in 2009. The company is heavily indebted and has a $40billion revolving credit line
General Electric was once popular for its good dividend and earnings consistency, but it found that it could no longer afford to pay quarterly dividends for a dark horse that was rapidly emerging in the field of automotive materials. Recently, it reduced the dividend to one cent to release cash. GE's share price has fallen to its level during the financial crisis. In addition, the SEC is also investigating its accounting accounts, including $22billion in non cash expenses incurred in the third quarter due to the acquisition of the power business
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