Summary
GE stock was the second-worst performer in the S&P 500 in 2018.
The stock price has plummeted by ~40% since H. Lawrence ("Larry") Culp, Jr. was named CEO on 10/1/18.
GE Power's staggering $631 million loss for the quarter ended 9/30/18 is a major reason why the stock price fell by 57% last year.
Investment thesis
Uncle Ben’s admonition in Spider-Man that "with great power comes great responsibility" accurately defines the current status of General Electric (GE) CEO H. Lawrence (“Larry”) Culp Jr. As the first outsider to lead the iconic 126-year old conglomerate, Culp is faced with the daunting task of “fixing” the company, which incurred a monumental loss in the quarter ended 9/30/18, principally because of a goodwill impairment charge of $22 billion before tax, related to GE Power. The purpose of this article is to present a “12-StepProgram” to help “fix” GE Power for the company’s review and consideration.
The author invites any and all comments about this article in an effort to engage meaningful dialogue in this regard.
Recent developments
The author’s viewpoint that Culp did “a commendable job of addressing the issues discussed” at GE’s 2018 Q3 earnings webcast on 10/30/18 was not a sentiment shared by the authors of a WSJ article whose harsh criticism said that “he fumbled a task straight out of Executive Leadership 101.” They also noted that GE stock sank 10% and traded below $8 for the first time since the financial crisis.
It is of utmost importance that Culp makes a favorable impression when he hosts the company’s 2018 Q4 earnings webcast on 1/31/2019.
