|Bid||0.00 x 0|
|Ask||0.00 x 0|
|Day's Range||7.55 - 7.90|
|52 Week Range||6.54 - 8.92|
|Beta (3Y Monthly)||1.25|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||0.04 (0.49%)|
|1y Target Est||N/A|
The furor over GE's accounting underscores how companies are struggling to price for the future at a time when people are living longer.
(Bloomberg) -- General Electric Co. has “very high” exposure to the long-term care insurance market and is worse than average when it comes to the adequacy of reserves tied to those policies, according to Fitch Ratings.Genworth Financial Inc., which was spun off from GE in 2004, and Unum Group also are below average, Fitch said Tuesday in a report that analyzed the assets backing reserves that fund future cash flows for long-term care businesses. GE said its current reserves are “well-supported” for its long-term care portfolio. Insurers in recent years have been burned by the policies, which pay for home health aides or nursing-home stays, amid higher-than-expected costs and low interest rates.“Exposure to the long-term care market remains a plague,” Anthony Beato, director of insurance at Fitch Ratings, said in a statement. “It continues to be a risky product despite the adoption of more conservative reserving philosophies that more closely align to its volatile liabilities.”The policies are among the riskiest products at U.S. life insurers because of their volatility, high capital requirements and sensitivity to interest-rate risks, according to Fitch. The ratings company expects insurers to add more funds to back the policies in the near to immediate term.GE has been grappling with issues from an old book of insurance contracts, announcing a $6.2 billion charge in 2018 tied to that portfolio. Harry Markopolos, the fraud examiner known for calling out Bernie Madoff, released a report last week that slammed GE’s insurance accounting and its holdings in oil-services company Baker Hughes.He said GE will need to boost insurance reserves by $18.5 billion immediately in cash and take an additional noncash charge of $10.5 billion when new accounting rules take effect. GE pushed back, with Chief Executive Officer Larry Culp calling the claims “market manipulation.”The reserve issues have hammered GE shares, which have dropped more than 50% since the beginning of last year. Markopolos’s claims sent them down 11% on Thursday, though they’ve since reversed some of that decline. The stock slipped 3.2% to $8.39 at 2:10 p.m. in New York.GE has been seeking to reassure investors. The company said Monday in a post from Steve Winoker, the vice president of investor communications, that its role as a reinsurer means it won’t be responsible for 100% of every claim on every life. Goldman Sachs Group Inc. analysts said Tuesday in a note that GE appears to hold high reserves compared with competitors.“Our current reserves are well-supported for our long-term care portfolio characteristics,” GE said Tuesday in an emailed statement. “Our future liabilities depend on variables that will play out over decades, not years, and are assessed using rigorous annual testing processes, sound actuarial analysis and the application of regulatory and accounting rules.”A spokeswoman for Unum said in an email that the insurer is focused on its strategy which includes effectively managing the long-term care business.Julie Westermann, a spokeswoman for Genworth, said in an emailed statement that the insurer has been working to improve the legacy long-term care business and believes its reserving process is appropriate. Genworth has boosted premiums and will seek more increases in coming years, she said.(Updates with shares, Goldman report, company comments starting in seventh paragraph.)\--With assistance from Richard Clough.To contact the reporter on this story: Katherine Chiglinsky in New York at email@example.comTo contact the editors responsible for this story: Michael J. Moore at firstname.lastname@example.org, Dan Reichl, Daniel TaubFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
After forensic accountant Harry Markopolos savaged General Electric’s accounting procedures in a report that sank the stock, GE got some good news from Goldman Sachs.
General Electric Co (NYSE: GE ) stock initially took a big hit last week following accusations of rampant fraud by former Bernie Madoff whistleblower Harry Markopolos, but one analyst says the allegations ...
General Electric Co ranks among the riskiest backers of long-term care insurance, suffering from both high exposure to claims and a relatively small cash pile to pay them, Fitch Ratings said in a report on Tuesday. The Fitch report, which the credit rating agency produces annually, echoed concerns raised last week by financial investigator Harry Markopolos, who estimated that GE has under-reserved by $29 billion for its long-term care policies.
General Electric Co ranks among the riskiest backers of long-term care insurance, suffering from both high exposure to claims and a relatively small cash pile to pay them, Fitch Ratings said in a report on Tuesday that sent GE's shares tumbling. The Fitch report, which the credit rating agency produces annually, echoed concerns raised last week by financial investigator Harry Markopolos, who estimated that GE has under-reserved by $29 billion for its long-term care policies. GE shares were down more than 3% at $8.40.
Shares of General Electric Co. fell Monday, as the big bounce of last week’s lows lost some steam, while the industrial conglomerate continued to defend itself from last week’s attack by a short seller.
The following are the top stories in the Wall Street Journal. - Twitter Inc and Facebook Inc suspended accounts they believe to be part of a Chinese effort to undermine antigovernment protests in Hong Kong, marking the first time the companies have pointed to China as a source of disinformation campaigns, company representatives said on Monday. - Drugmakers Endo International Plc and Allergan Plc are in talks to avoid going to a landmark trial set to begin in October over the opioid crisis, according to people familiar with the matter.
The Kansas Insurance Department’s news release says it takes allegations of fraud seriously, but adds that the Markopolos report doesn’t take all information available to the regulator into consideration.
Insider purchasing was seen at companies favored by Carl Icahn and George Soros last week. The CEO of an industrial giant put his money where his mouth is as well. Conventional wisdom says that insiders and 10% owners really only buy shares of a company for one reason -- they believe the stock price will rise and they want to profit from it.
General Electric Co reinforced its defense of its accounting practices on Monday after investors asked more questions about an unusual research report last week that accused the jet engine and power plant maker of financial fraud. The 175-page report https://www.gefraud.com, published on Thursday by Harry Markopolos, who blew the whistle on Bernard Madoff's Ponzi scheme, renewed concern about GE's finances and sent its stock tumbling. "Some of (the) questions I've been receiving go straight to the heart of GE's culture, so let me be clear: we operate with absolute integrity and stand behind our financial reporting," Steve Winoker, GE's investor relations chief, said in a statement on Monday.
General Electric Co intensified its defense of its accounting practices on Monday after investors questioned it about an unusual research report alleging GE failed to put aside money to cover $29 billion in potential insurance losses and improperly counted profit from subsidiary Baker Hughes. The Boston-based conglomerate's new comments follow the release on Thursday of a 175-page research report https://www.gefraud.com that alleged there was fraud in GE's accounting, renewing concern about the company's financial position. GE's shares fell as much as 15% after financial investigators Harry Markopolos and John McPherson published the report on Thursday, which said GE needed to set aside $29 billion for insurance reserves.
General Electric Co reinforced its defence of its accounting practices on Monday after investors asked more questions about an unusual research report last week that accused the jet engine and power plant maker of financial fraud. The 175-page report https://www.gefraud.com, published on Thursday by Harry Markopolos, who blew the whistle on Bernard Madoff's Ponzi scheme, renewed concern about GE's finances and sent its stock tumbling. "Some of (the) questions I've been receiving go straight to the heart of GE's culture, so let me be clear: we operate with absolute integrity and stand behind our financial reporting," Steve Winoker, GE's investor relations chief, said in a statement on Monday.
GE and others have since countered claims by Markopolos, who was reportedly working for a hedge fund with a short position on GE. Last thanksgiving, I was bullish as I thought the credit risks were overstated.
The spread between the 2-year and 10-year yield is now back above 10 basis points, and the further they get away from each other the more things might calm down. Another piece of news that might be helping: Reports in the media say Huawei will get a three-month extension from the U.S. Department of Commerce on a license that allows it to buy parts from U.S. companies. Fed Chair Jerome Powell is scheduled to speak Friday morning.
General Electric disputed the accounting fraud allegations raised by forensic accountant Harry Markopolos. The claims triggered a dive in GE stock last week.
Harry Markopolos, the forensic accountant who warned securities regulators about Bernie Madoff's investment scheme, posted a 175-page missive on Aug. 15 that likened General Electric GE to Enron.
(Bloomberg) -- General Electric Co.’s biggest plunge in 11 years came at an awkward time for some of Wall Street’s savviest investors, after a recent buying spree by the likes of Renaissance Technologies, Citadel Advisors and Adage Capital Management.Hedge funds added more shares of GE than any other company to their industrial investments in the second quarter, according to an initial analysis of U.S. regulatory filings compiled by Bloomberg Global Data. Their holdings increased by 25% to a total of 199.3 million shares, valued at $2.09 billion at the quarter’s end.While some recent buyers may have sold since then, many of them were probably left holding the bag when Harry Markopolos, who rose to prominence by blowing the whistle on Bernie Madoff, on Thursday accused GE of “accounting fraud.” Markopolos’s report wiped out much of the company’s share gains this year. Chief Executive Officer Larry Culp labeled the analysis “market manipulation -- pure and simple.”While a Friday advance softened the blow, the rout highlights the perils in trying to call a bottom as a company attempts a turnaround from an epic collapse. GE’s market value fell by more than $200 billion in the two years ended Dec. 31 amid weak cash flow, a slump in its power division and two CEO changes. While Culp vowed to improve financial transparency after taking over in October, Markopolos accused GE of masking tens of billions in liabilities.The shares surged 9.7% to $8.79 at the close in New York, the most in six months, with some analysts expressing skepticism over Markopolos’s report. But that didn’t make up for all of GE’s 11% plunge on Thursday, the sharpest one-day drop in 11 years.It’s impossible to know which hedge funds may have sold some or all of their GE holdings before Thursday’s rout, and the firms typically don’t discuss their holdings.Buyers, SellersRenaissance added 38.3 million GE shares in the second quarter, more than doubling its holdings in the company, according to data compiled by Bloomberg. Renaissance is a quantitative fund that makes investing decisions based on mathematical and statistical methods, a representative said, declining to provide additional comment.Citadel’s hedge fund bought about 4.5 million shares during the period, increasing its stake more than sixfold, according to regulatory filings.Adage, which declined to comment, took a new position of 7.24 million GE shares.Not all hedge funds were buyers in the second quarter. Steadfast Capital Management dumped almost all of the 15.3 million GE shares it held as of March 31. The firm didn’t immediately respond to a request for comment. Tocqueville Asset Management, which declined to comment, pared its holdings 37% to 1.7 million shares.This week, prominent buyers swooped in amid the selloff. Hedge fund billionaire Stanley Druckenmiller said he picked up GE shares on Thursday. The implication that Culp and the new management team are engaged in intentional fraud is “outrageous,” he said by email.Culp himself purchased about $2 million in shares Thursday, Boston-based GE said. That followed a $3 million stock purchase earlier this week, which the company called a reflection of “confidence in GE’s long-term strengths and its progress.”‘Impending Losses’Markopolos, who is working with a short seller, said GE will need to increase its insurance reserves for a long-term care portfolio immediately by $18.5 billion in cash -- plus an additional noncash charge of $10.5 billion when new accounting rules take effect. GE also is hiding a loss of more than $9 billion on its holdings in oilfield-services company Baker Hughes, he said.“These impending losses will destroy GE’s balance sheet, debt ratios and likely also violate debt covenants,” Markopolos said in his report.GE defended its accounting in a statement by Culp and board member Leslie Seidman, who chairs the audit committee.“The fact that he wrote a 170-page paper but never talked to company officials goes to show that he is not interested in accurate financial analysis, but solely in generating downward volatility in GE stock so that he and his undisclosed hedge fund partner can personally profit,” Culp said of Markopolos.Seidman said the analysis included “novel interpretations and downright mistakes” about accounting requirements.Hedge-Fund HoldingsFor the analysis of hedge-fund investments, Bloomberg looked at 824 filings for the second quarter, which showed $1.66 trillion in total stock holdings. Industrial-sector investments accounted for $120.5 billion, or 7.2% of the value of the securities listed in the filings. The firms cut their holdings the most in railroad CSX Corp., which has fallen 17% since the end of the period.Several analysts, while cautious about GE’s outlook, defended the company.“Our initial reaction is that we believe that there are sufficient shortcomings in the short report’s assertions and we continue to believe in CEO Larry Culp’s ability to improve the company over time,” Citigroup analyst Andrew Kaplowitz wrote in a note to investors.\--With assistance from Esha Dey.To contact the reporters on this story: Jack Pitcher in New York at email@example.com;Brendan Case in Dallas at firstname.lastname@example.orgTo contact the editors responsible for this story: Brendan Case at email@example.com, Kara Wetzel, John LauermanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The stock market fell in volatile fashion amid China trade news and the first inverted yield curve since 2007. Walmart, Cisco, Macy's, GE were big movers.