GE stocks experienced the biggest drop since 2009

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GE stocks experienced the biggest drop since 2009

May 24, 2018 - 09:45
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Yesterday GE shares showed the biggest drop since 2009, Bloomberg informs. It looks like the current problems of the company, including insufficient cash flow and low demand for gas turbines, cannot be solved in the nearest future. Meanwhile, investors are running out of patience.

GE Plant in Schenectady, USA | © UpstateNYer - Own work, CC BY-SA 3.0, via Wikimedia Commons

Yesterday GE shares showed the biggest drop since 2009, Bloomberg informs. It looks like the current problems of the company, including insufficient cash flow and low demand for gas turbines, cannot be solved in the nearest future. Meanwhile, investors are running out of patience they have left by this time after numerous troubles GE had in recent years.

Today the company is experiencing the largest slump in its 126-years history and stays at the very bottom of Dow Jones Index, since new CEO John Flannery took his position last year.

Investors are now worried about energy market severities that mean a very slow recovery for GE.

Shares dropped by 7,3% on Wednesday to $14,18. This is the biggest slump since 2009, which exceeded November losses when GE cut dividends. Yesterday’s losses overlapped minor gains that stocks showed in the beginning of this month.

It seems that gas turbines market will stay in the same situation during next few years. It will put pressure at GE’s biggest business division.

While health-care and jet-engines divisions of the company show good results, GE is still struggling with its insurance and power service business.

However, GE management is working on company’s restructuring. As a result of power division overhaul, expenses will be cut by more than $1 billion this year, which exceeds target level.

Although company has not informed about dividend plans yet, this is the issue that investors are most concerned about, and it will definitely influence their future behavior.

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