General Electric earnings call and nationalization

Discussion in 'Stocks' started by bruins1, Jul 17, 2009.

  1. bruins1


    I have been holding the common stock for quite a while with substantial losses. What are the chances that GE will be nationalized? The earnings call today seemed somewhat bad.
  2. dealmaker


    Chances of GE getting nationalized are nil. You will have to hold for a very long time, GE Finance is in the eye of the storm e.g. commercial real estate, credit cards, small business loans etc. and they are 50% of the company. Not the best allocation of capital but, you are collecting a small dividend.
  3. Immelt seems like a nice guy, but obviously in way over his head. Some might think his close ties with Gummint will help. But "he who sups with the devil better have a long spoon"

    Be much better if they get another CEO, then decide a focus for the company, sell off the rest. Too many moving parts.

    If they did all that, could be an average, to above average, market performer.

  4. Nationalization?
    Good luck with that.
  5. The word you're looking for is "divestiture". It would be better to break up GE into it's different operating sectors and isolate the finance subsidiary on its own. :cool:
  6. They might not get nationalised but what Obama will do to GE might cause shareholders to get wiped out.

    If they force GE to split up, The standalone Financial entity on its own could not survive and would end up getting hit with collateral calls which ironically would cause it to collapse and have creditors then go after the parent company.

    So the Irony is Obama could cause a functional but limping company which may recover over time to collapse, then end up wiping out shareholder equity.