General Electric Co. (NYSE: GE) had a market cap that made it the most valuable publicly traded company as recently as 2006. Due to the implosion of its earnings, it is no longer in the top 30, having dropped to 32nd.
GE’s market cap is $180 billion. It has dropped 31% this year. That puts its value below Toyota at $184 billion and just above Comcast at $173 billion. Many believe that if GE posts worse results going forward or cuts its dividend, the stock has further to fall.
Bloomberg put the drop in GE’s stock in perspective:
With about $26 billion of market value wiped out over the past five days, the loss for GE shareholders this year has now reached $100 billion — more than the current market cap of Goldman Sachs Group Inc.
GE is the worst performer by far in the Dow Jones Industrial Average this year as it grapples with weak markets in power, oil and locomotives. The issues took center stage last week as the Boston-based company slashed its cash and profit forecasts while reporting earnings that fell well short of Wall Street estimates.
Also note that GE’s share price has dropped over 60% since recently ousted CEO Jeff Immelt took over in 2001.
Another reason the stock may have further to fall is that even people who supported the company have started to abandon it. According to Barron’s:
It’s not just the bears who are predicting that General Electric (GE) will slash its dividend. In a note published Monday, Deane Dray, who covers the conglomerate for RBC Capital Markets with an Outperform rating, wrote, “We expect a dividend cut announcement before Nov. 13.” Nov. 13 is when the company’s new CEO, John Flannery, will present more detailed plans of the troubled company’s restructuring plans and asset pruning at its investor day. “We manage the company for total shareholder return, balancing growth and the dividend payout,” Flannery said in part.
Will the last person to leave GE shares please turn out the lights.