Almost without fail if I write something about General Electric Company (NYSE: GE), or even mention the company in passing, someone will add a comment that its CEO, Jeffrey Immelt, has overstayed his welcome at the company and he has to go.
Here are a few samples:
- "Why is Jeff Immelt still employed by GE? he has ruined the company and cares nothing about his shareholders. He and his board need to go empty handed."
- "Travis the Chimp would have done more for GE shareholders than Jeff Immelt."
- "GE is a great company, but CEO Immelt has outlived his welcome and needs to be shown the door. He has presided over the decline of GE stock from $60 in the year 2000 to $27 now."
You can see from the last comment that even a year ago this sentiment was rampant. This person must really be steamed now; GE closed at $9.62 on Friday.
Many supporters of GE have been wrong about the stock for quite some time, because it has only gone one direction for a while and that is down. My colleague Steve Halpern posted General Electric (GE): Blue chip bargain last July and I thought there was merit in the story. So I was wrong, at least in my timing, and along with Steve and "my pal Warren" have been disappointed in the stock performance with everyone else.
While there are many that would hold Immelt responsible for the poor performance, and I have felt in the past that the company should sell off certain divisions or split up, I'm not sure what in particular he could have done to bolster the company against the economic firestorm we find ourselves in today.
Responding to a comment, I added one of my own:
What in particular do you think he did wrong? More diversification? Less? Sell something? Buy Something? Drop the finance division, historically the most profitable? Besides the stock going nowhere for ten years and then tanking, what is different in how GE performed vs the S&P 500, which also has gone nowhere."
So what about it? Anybody have any specific suggestions that they think CEO Immelt could have done to bolster the stock price and withstood the financial collapse that few others have been able to do?
I still believe in the company and I am considering buying more stock. However, I think there are a lot of good companies to choose from right now. GE should be on everyone's watch list.
Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture and planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: I own shares of GE.
Reid Hoffman: LinkedIn will go public (at some point)
Retailers can't wait for Black Friday, open Thursday
Tiffany's serves up solid quarterly earnings
Reader Comments (Page 1 of 1)
3-15-2009 @ 4:56PM
ValueHuntr said...
GE is way undervalued.
3-16-2009 @ 9:00AM
Beltway Greg said...
A trout in the barrel. Buy, buy, buy. I hated it at $25, love it at $9. Will reconsider the position at $20. The company, as I wrote months ago, is just too much of a monster. (I think I wrote that it had the potential to be disquiet on too many fronts.) It's the Citigroup of conglomerates. I think that these types of do everything for everyone type of companies will fade from view. They need to be more decentralized perhaps reporting under the same economic umbrella but with entities that function without regard to events back at the mothership.