Stock trading information – GE down.
Just when it looked like General Electric was getting out of their woes, a stock trading information hit the stock today. The company is down over 3% as GE will take a $6.2 billion charge linked to the weakness in their Health insurance portfolio. This news surprised investors with deeper than expected problems in one of their core business.
Chief Executive John Flannery said: “At a time when we are moving forward as a company, a charge of this magnitude from a legacy insurance portfolio in runoff for more than a decade is deeply disappointing.”
GE Capital, though, will try to keep some sort of healthy funding levels by adding $15 billion over seven years into the North American Life & Health business. This, they hope, will mitigate some of the investors’ worries.
The General Electric analysis is quite simple: become smaller and shed your assets. By becoming a leaner machine, they can then start moving towards the right direction. Mr. Flannery is doing exactly that. While many investors worry about this one-time hit, I would be buying on this news. The GE symbol will not go away anytime soon.