- General Electric’s stock is surging after the company ousted its CEO, but its issues date back far beyond his tenure.
- GE has lost roughly $US500 billion in market value since August 2000, including a nearly 30% hit to its stock price this year alone.
But the company’s problems date back much further than Flannery’s tenure.
Since achieving a peak market cap of $US594 billion way back in August 2000, GE has seen its value tumbled by almost $US500 billion. As of Friday’s close, the company was worth just $US98 billion.
While GE’s stock spiked as much as 16% on the news of Flannery’s departure, the company’s shares are still down 29% this year. Losses have mounted as investors have grappled with the toxic combination of increasing debt and diminishing profits.
GE’s latest woes stem from continued weakness in its power division, which have been a drag on the overall business. The company said on Monday that it would absorb a goodwill charge of up to $US23 billion for the power segment.
On a broader basis, the company has struggled to restructure its portfolio in timely fashion, something for which Flannery was regularly criticised. The company said in June that it would spin off its healthcare business and split from oil giant Baker Hughes in a massive reorganization.
The hits keep coming for GE, which was removed from the bellwether Dow Jones industrial average over the summer. GE shares only recently fell below the $US100 billion market cap threshold for the first time since the start of the 9-1/2-year bull market, back in March 2009.
- A $US255 billion Scottish investment firm has gotten in early on Spotify, Lyft, and Airbnb – here’s how it discovers hidden gems before everyone else
- ‘We didn’t learn anything’ – Billionaire investor Stanley Druckenmiller says the next financial crisis could be worse than the last, and lays out how it might happen
- ‘Leadership seems out of whack’ – The stock market is behaving unusually, and it could be signalling that the next big crash is near
NOW WATCH: Money & Markets videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.