Between the good press GE (GE) received in Barron’s recently and a little run due to break-up talk, Wall St. would think the conglomerate’s stock might hold its ground. But, it hasn’t worked out that way, Even with Barron’s saying the stock could move to $50 and the sale of its performance challenged plastics unit, GE is flat. For the year-to-date, the stock is up about 1%. The closest comparable to GE, Siemens (SI) is up 33% this year. And, Siemens has replaced its top management in the midst of a scandal.
At least a million explanations for why GE’s stock is flat have been floated. But, one recent incident may be telling. GE had a look at buying Dow Jones (DJ). The financial information company would have been put into NBC and could have bolstered the units CNBC operation. Dow Jones would at that point have branding in print, online and on TV.
GE backed off. It even asked Microsoft (MSFT) into the deal to share the risk. As Paul LaMonica pointed out at CNNMoney, GE does not needs Microsoft’s cash to close a deal for Dow Jones. It was simply not willing to take the whole chance.
And, perhaps that is what the market sees when it looks at GE. No risk. No reward.
Douglas A. McIntyre can be reached at [email protected]. He does not own securities in companies that he writes about.
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