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Back to Basics: Whatâ??s Driving General Electric?

By Hilary Kramer

It has been a challenging couple of years for General Electric (NYSE:GE) shareholders, as they have collectively lost $200 billion since the stock hit $33 on July 20, 2016.

Full disclosure: I never suspected the bleeding would go on this long. Since GE had one of the best management cultures in history, I counted on them to turn the trend around.

After all, GE is still one of the 20 biggest American companies by revenue: a behemoth that has $377 billion in assets and brings in another $122 billion a year. If scale is the salvation, GE management has all the resources that are required to get the stock back on the right track.

Thatâ??s the scenario I wanted to believe for years. A smaller company with less adroit leadership would have simply disintegrated by now and stopped the bleeding once and for all.

But GE was too big to die. Unfortunately, it has become increasingly clear that its sprawling scope is part of the problem as well as the solution.

And even if GE can get small enough to make shareholders happy in the long run, itâ??s now clear that the short term isnâ??t going to bring a whole lot of joy.

No Gain Without Pain

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