GENERAL ELECTRIC: What happened? - Should I Buy GE Stock Now? | Summary and Q&A

TL;DR

General Electric (GE) has been experiencing financial difficulties due to a series of missteps and acquisitions. Despite potential for recovery, there are several challenges that make it risky to invest in GE at this time.

Key Insights

• 💨 GE's struggles can be traced back to a shift away from innovation and reliance on GE Capital.
• ↩️ Former CEO Immelt's overpriced acquisitions have not provided the expected returns.
• 🌱 The current CEO Flannery plans to refocus on Aviation, Power, and Renewable Energy segments and reduce debt, but challenges remain.
• ❣️ GE's heavy debt burden, credit rating downgrades, and potential future impairments make it a risky investment.
• 🤩 Potential obstacles to GE's recovery include finding solutions for GE Capital, preventing further downgrades, and retaining key employees.
• ❓ Market conditions and future events can significantly impact GE's stock price.
• 🏃 Investors should exercise caution and thoroughly assess the risks before considering investing in GE.

Transcript

so what has happened to GE in case you haven't seen it GE has been struggling here's a chart of GE going back to 2016 and here's that same chart but this time with the sp500 in there as well yeah it's been bad so the question is what happened and where is it going to go from here so in this video I'm going to go through the research I've done on GE... Read More

Questions & Answers

Q: What were the main reasons behind GE's recent struggles?

GE's problems can be attributed to a shift towards focusing on GE Capital, overpriced acquisitions, cutbacks in research and development, and a lack of innovation.

Q: How does GE's debt impact its future prospects?

GE's heavy debt burden makes it expensive for the company to raise short-term financing and could lead to dilution of shares or asset sales, hindering its ability to recover and grow.

Q: What challenges does GE face in its plan to spin off GE Healthcare?

The healthcare spin-off may come with significant debt or an underfunded pension obligation, reducing its value and complicating the improvement of GE's balance sheet.

Q: What factors could potentially further harm GE's stock price?

Factors such as another dividend cut, negative response from Warren Buffett, issues with the Baker Hughes deal, or problems with the healthcare spin-off could negatively affect GE's stock price.

Summary & Key Takeaways

• GE's struggles began when former CEO Jack Welch handed over the reins to Jeffrey Immelt, who focused heavily on GE Capital and made overpriced acquisitions.

• The company is now being led by CEO John Flannery, who plans to focus on Aviation, Power, and Renewable Energy segments and reduce debt by 25 billion.

• However, GE's significant debt, credit rating downgrades, and potential future impairments raise concerns about its ability to recover and make it a risky investment.