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GE Shares Note The Worst Weekly Decline Since The Financial Crisis

GE Shares Note The Worst Weekly Decline Since The Financial Crisis
Earlier in the week, General Electric had announced that it would have to take a one-time hit of $11 billion in charges and a possible breakup of the company. This created a rumble in stock market as it spooked the investors of the company resulting in the price of the stocks of the company noting the largest weekly percentage decline ever since the financial crisis. The shares of the company fell for the fifth straight session on Friday.
On Friday, there was a drop of 3 per cent in the shares in the U.S. industrial conglomerate to reach $16.26. this drop created a 13.3 per cent for the week in its stocks which was also the biggest such weekly decline ever since the financial crisis and March 2009.
It was only a day ago that the stocks had crossed the $17 dollar mark – a first time since about more than 7 years. On Friday, the share prices touched a low of $16.02 and there were chances that the price would go down below $16.
On Tuesday, GE had announced that it would have to rake a hit of over $11 billion in lieu of taxes, impairment and insurance charges and this resulted om the latest session of selling of the stock that had already been struggling.  In addition to this, indications that the company was closely examining at breaking itself up was given by the new GE Chief Executive John Flannery.
“The company has a more complicated issue than just making some changes to its business portfolio,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York. “These issues are going to probably take a long time to resolve.”
Because of GE’s “cash squeeze” and the apparent debt pressures, the company could finally be pushed into raising funds through issuing of equity, said Deutsche Bank analyst John Inch on Friday and this had also potentially piled pressure on to the shares of the company.
There are increased prospects that GE cold cut its dividend further, said Inch who had rated the GE stocks as “sell” at a $15 price target. In addition to reducing its profit forecast for 2018, the company had also cuts its dividend in half in November.
Here are no plans of the company o raise equity, said a GE spokeswoman. The industrial cash flow of the company would come be more than its prior full-year estimate, GE has said earlier this week.
There has been a steady fall in the stock price of GE throughout 2017 and the prices have fallen by almost 45 per cent within a time period of just over a year. this has frustrated shareholders because at while GE shares have fallen, the wider stock market has seen a rise in record levels.
At the beginning of 2018, there had been a 11 per cent rebound in the stock. However, the stock is now 6.8 per cent lower for the year. Within the blue-chip Dow Jones Industrial Average, the worst performing component was GE.

Christopher J. Mitchell

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