General Electric (NYSE: GE) has experienced a 52.43% share price drop in the past year. The conglomerate ranked no. 1 in the S&P 500 in 2004, worth USD 400 billion, is now ranked no. 59 in the S&P’s most valuable companies. GE, is now worth less than USD 100 billion, is worth less than 10% Apple, (APPL). GE’s share fell to a 9-year low of under USD 12 on Monday.
In attempts to halt the decline, GE is selling business such as its railroad division, it’s health-care unit that makes MRI machines, and the Thomas Edison's light-bulb unit. However, investors continue to offload their holdings of the company in recent days as concerns over GE Power, which is considered to be the most troubled part of the company, was forced to close its power plants as two of its gas turbines failed in Texas, leading to a 9% share sell-off.
Moreover, poor investment by GE has resulted in an accumulation of vast amounts of debt. GE currently has a net debt of USD 194.2 billion, which was 22 times greater than GE’s expected adjusted earnings for 2018. Currently, interest expenses are roughly worth approximately 50% of GE’s operating income. As of Friday, 28th at 11.am EST, the GE stocks fell 0.82% to USD 11.44. According to UBS, there is no turnaround in the near future for GE, as UBS lowered its price target by USD 3 from USD 16 to USD 13.