A startling stat reveals just how dire things have become at GE
- General Electric's stock is surging after the company ousted its CEO, but its issues date back far beyond his tenure.
- GE has lost roughly $500 billion in market value since August 2000, including a nearly 30% hit to its stock price this year alone.
Struggling General Electric just ousted CEO John Flannery after less than a year. The company said on Monday that H. Lawrence Culp, Jr. would take over as chairman and CEO effective immediately.
But the company's problems date back much further than Flannery's tenure.
Since achieving a peak market cap of $594 billion way back in August 2000, GE has seen its value tumbled by almost $500 billion. As of Friday's close, the company was worth just $98 billion.
While GE's stock spiked as much as 16% on the news of Flannery's departure, the company's shares are still down 29% this year. Losses have mounted as investors have grappled with the toxic combination of increasing debt and diminishing profits.
GE's latest woes stem from continued weakness in its power division, which have been a drag on the overall business. The company said on Monday that it would absorb a goodwill charge of up to $23 billion for the power segment.
On a broader basis, the company has struggled to restructure its portfolio in timely fashion, something for which Flannery was regularly criticized. The company said in June that it would spin off its healthcare business and split from oil giant Baker Hughes in a massive reorganization.
The hits keep coming for GE, which was removed from the bellwether Dow Jones industrial average over the summer. GE shares only recently fell below the $100 billion market cap threshold for the first time since the start of the 9-1/2-year bull market, back in March 2009.
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