General Electric Co. (NYSE: GE) filed an S-3 form with the U.S. Securities and Exchange Commission (SEC) on November 7. This is far from a traditional capital raise, and note that there will be no traditional share sales that take place through brokerage and trading firms on this sort of filing. What is happening is that GE is making more shares available for sale directly to the public via GE Stock Direct through Computershare. The terms for the filing were up to 75 million shares, which would be nearly $2 billion, based on current market conditions.
The plan requires that investors be previous owners of GE stock or that they buy a minimum of $250 in stock through the plan upon enrollment. Shares purchased through the plan will be held in “book entry” form, and instead of receiving stock certificates, investors will receive statements of the account.
Dividends can be reinvested into the plan at no fee to purchase additional stock, or investors may elect to receive cash dividends. Additional purchases on the plan may be made as often as once a week, ranging from $10 to $10,000 in GE stock per transaction. However, these additional purchases will be charged a fee, as opposed to reinvesting dividends.
Upon electing to sell shares held in the account, there will be a transaction fee of $10, plus an additional $0.15 per share that will be deducted from the proceeds. Ultimately this plan allows investors to buy shares directly from GE and potentially deal with minimal commission charges and fees.
GE shares closed at $26.41 on Friday, its stock has a consensus analyst price target of $29.00, and it has a 52-week trading range of $23.69 to $28.09.
Again, this is not your traditional filing and it will not create any large trading blocks on the open market as you might see after other traditional secondary offerings or capital raises.