General Electric Has a Credibility Problem
The former icon’s investor relations are less than ideal, and it keeps hurting the stock.
General Electric Co. needs to open its doors a bit more.
Photographer: Bloomberg/BloombergBack in June of 2018, when General Electric Co. was tossed from the Dow Jones Industrial Average, capping a string of indignities that had gutted the former corporate American icon, this newsletter suggested it might be a blessing: “Getting tossed from that weird, exclusive club is often a sign the worst is over,” we wrote.
Shockingly, despite this newsletter’s usually godlike powers of prognostication, this call has not aged well! The stock collapsed last fall. It rebounded this year, but then re-collapsed today, falling 15% at one point, its worst sell-off in four years. The trigger was a report from Harry Markopolos, the guy who took down Bernie Madoff, claiming GE is a big old fraud hiding $38 billion in red ink. Markopolos is working with a short-seller; GE denies his claims; and Brooke Sutherland has read his report and isn’t impressed.