Barron's: Buy $GE Pre-Breakup

Barron’s headline: GE Stock Is a Buy as Breakup Looms
By Al RootFollow
Updated Aug. 5, 2022 12:23 pm ET / Original Aug. 5, 2022 4:00 am ET

So, it comes to this— General Electric , once arguably the greatest of American companies, will cease to exist, at least as the industrial titan it once was.

After more than 20 years of decline, the company is entering the final stages of a process that has seen the General Electric of old slowly dismantled—the corporate powerhouse founded by Thomas Edison doesn’t even make lightbulbs anymore—until just three parts remain. Soon, those units—GE’s aviation, energy, and healthcare businesses—will be separated into individual companies, starting with GE Healthcare, which could be spun off in early 2023. It’s a sad end for a giant humbled by missteps.

Every ending, however, is also a new beginning. Unencumbered by the past—and past mistakes—the three companies have the potential to compete more fiercely than the old cumbersome behemoth could. What’s more, they should earn higher stock market valuations separately than they could as part of an unwieldy conglomerate.

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GE offices searched in France accused of tax fraud.

Unions claim GE exaggerated its loss in France to justify a layoff but in the process understated earnings and committed tax fraud.

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GE Reporting Difficulties Continue in Renewable Energy. Spinoff may be delayed.

Cost cutting helps but onshore wind turbine business still losing money. Offshore participation blocked by a patent lawsuit. Still no info on which unit will get the GE electrical equipment business. Probably renewables.

Jet Engines aviation is the company jewel and has large order backlog. But production capacity is limited by labor and materials shortage.

GE seems to be making progress toward recovery but the route is not easy. Could be bumpy for a while yet.

Healthcare spin off doing well and GE still owns a big chunk of stock.

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