General Electric Co.’s (NYSE: GE) market cap has fallen so far that it stands 30th among all U.S. companies, below home improvement retailer Home Depot Inc. (NYSE: HD). Now down to a market cap of $193 billion, GE has fallen 30% so far this year.
GE’s market cap has dropped below several other niche companies. Oracle Corp.’s (NYSE: ORCL) market cap is $206 billion, and UnitedHealth Group Inc.’s (NYSE: UNH) is $205 billion. Each has revenue well below GE’s.
Several factors have dropped GE’s value below that of these other stocks and almost three dozen others. First, Wall Street has completely lost faith in GE’s future. Former CEO Jeff Immelt has been thrown out of the company because of his inability to restructure GE and improve the performance of its units.
GE has also hinted it will cut its dividend, one of the few reasons to hold the shares. The company’s dividend yield is 4%, among the highest paid by any large American company.
And the most damaging factor that has undermined GE’s stock is the lack of any confidence that the new CEO, John L. Flannery, can turn it around. He has said he will sell off billions of dollars in GE assets. No one has any idea what he can get for these, because some are so badly damaged. And Flannery may be unable to improve the performance of what he will have left.
The reasons for the drop in GE’s shares have been very widely covered by the media, so, other than the dividend cut, there is no other reason for the shares to fall. However, it would have been hard to imagine that its market value could fall below that of a retailer that only serves one part of the retail market, even if its failure is a large one.