GE was once America's darling company. What has happened here troubles many. Its Banking division GE Capital which represents nearly 50% of the entire company is at the forefront or beginning of its troubles. Unfortunatley they got way overexposed in this financial banking crisis. Now realing from a Massive Debt overload they decided to counter with raising the dividend to a whopping 12%. Most astute market players saw this as a Red Flag knowing any heathly company does not distribute these kinds of dividends. More importantly CEO Jeff Immelt gave his word to the common shareholders meaning the general public he would honor the dividend for some time. That promise has been broken in just a matter of weeks with a complete reversal. No doubt many have been decieved and the only reason they were able to successfully pull this Ponzi off is off GE's past stellar reputation. Now we know they are in serious trouble and whats the next lies to come. Is it the Triple A or will they take the Tarp that they still claim they don't need. How will the stockprice fare if the next Leg drops?
You reap what you sow - that's what you get for giving away CREDIT - when you should be manufacturing some goods for SALE - this has caught a lot of people off guard, but the handwritting eas all over the wall
Good point. GE made it's bones as a broad based industrial company. It longtime chairman, Welch took it into the financial route. Welch's decision made him welthy, but that decision was the beginning of trouble for GE. The solution is to downgrade the financial part back to selling and financing or leases on products that GE makes and sells. Get rid of the fancy finance activity that GE got into under Welch's last years.