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GE Woes Deepen as SEC Investigation Throws Wrench in Turnaround
- tekism 9y agoHmm, you'd think this would make the stock go down (today), but it hasn't yet.
- sokoloff 9y agoConfounding news. Earnings were good; this news is negative. > The shares rose less than 1 percent to $16.97 ahead of regular trading in New York, erasing a gain of as much as 5.8 percent that followed the announcement of the company’s fourth-quarter earnings.
- jnordwick 9y agoHuh? GE missed eps estimates for 4q2017 ($0.29 vs $0.27). It had positive guidance for 2018, but not many believe them.
- dagw 9y agoIf everybody already assumed that they would miss estimates then announcing that you missed estimates won't affect the share price.
- freehunter 9y agoIf everyone already assumed they'd miss analyst estimates, then what's the point of an analyst?
- brixon 9y agoThe company's estimates and outside analyst's estimates are two different things. When they agree then I think the price gets reflected quickly, when they disagree it opens it up for more volatility.
- AznHisoka 9y agoDaily stock movements are practically random. Stocks go down even if earnings beat estimates.
- dagw 9y agoStocks go down even if earnings beat estimates. Only if you beat estimates by less than people had estimated you would.
- AznHisoka 9y agohttps://investorplace.com/2017/11/workday-inc-wday/#.WmioNOi7_Sw https://investorplace.com/2017/11/workday-inc-wday/#.WmioNOi... Workday beated estimates by over 50%, yet shares fell. I can give a lot more examples... Lots of investors also sell when earnings beat estimates because they think they'll be selling high, etc. Point is there are tons of factors and it is way too simplistic to say beating earnings = price increase on that day.
- dagw 9y agoThere are two estimates you need to consider. The official estimate and the 'secret' estimate that investors really think you should beat. Although most people focus on the first one, it's only the second one that really counts. Point is there are tons of factors and it is way too simplistic to say beating earnings = price increase on that day. Absolutely agree.
- mikestew 9y agoWorkday beated estimates by over 50%, yet shares fell. I can give a lot more examples... Par for the course for AAPL at earnings time for many years, not so much recently. Beat earnings, but didn’t beat the “whisper number”.
- jonbarker 9y agoThis really depends on how accurate analyst estimates have been in the recent past. Consistently beating estimates will produce less gains over time. Similarly, consistently missing earnings will eventually cause less price damage over the mid run (of course it will probably produce bankruptcy in the long run). Confounding this picture in this case is that the market is trying to price a bunch of spinoffs which have been announced or rumored.
- jnordwick 9y agoOld news. GE has been in free fall for a year now (down almost 50% over the last year and worst djia performer). Last week a warning came out and it fell then. It was pretty well anticipated that news relating to the insurance business was coming out this week. I guess the news is about inline with what was expected. Generally, by the time news like this hits the papers, everybody already knows about it, unless it is some secretive expose. This wasnt a secret.
- jonknee 9y agoIt's down over 1% at the moment, but with it already so beaten down there's a limit to the impact of more bad news.
- mathattack 9y agoMaybe the news was already baked in? Seems like a common underfunded long term liability issue that could be forseen in their financial statements. (Any company with long dated fixed liabilities and unrealistic investment return assumptions can fall into this)
- ghostcluster 9y agoStrong business and margins in the aircraft engine market, with a good future outlook in growth of the airline industry
- ams6110 9y agoLong-term care insurance is a racket. If you buy it, read the terms very carefully. Most policies are loaded with escape clauses and will end up paying only a small fraction of any eventual long term care costs.
- arbuge 9y agoPerhaps, but it still seems to be a big money-loser for long term care insurance companies, such as GE capital.
- mathattack 9y agoIt came in very handy for a parent. I’m an insurance skeptic, but if they were too it could have bankrupted both of us. (Yes - one anecdote doesn’t translate into data)
- daveFNbuck 9y agoAre you still an insurance skeptic? What does that mean?
- cmurf 9y agoInsurance skepticism is when the product seems more like gambling or an expensive savings plan, than it is about high cost risk management. The more inevitable some costly event is perceived, then why not just save for that event, rather than pay a premium for only partial coverage, etc. This is my complaint with referring to health insurance, a huge amount of which is b.s. What we have is an aging payment plan. We're all gonna get old, and it's gonna suck, and be expensive, might as well start paying now: oh guess what, you are, it's called Medicare payroll tax.
- chimeracoder 9y agoYou're right that health insurance isn't insurance at all. But to clarify: > What we have is an aging payment plan. We're all gonna get old, and it's gonna suck, and be expensive, might as well start paying now: oh guess what, you are, it's called Medicare payroll tax That would be the case if the following were true: * If Medicare's operations were purely funded by tax money, and * If the taxes people paid were proportional to their expected lifetime costs-of-care However, neither of these are true. Medicare's reimbursement rates are indirectly subsidized by private insurers (who then pass those costs on to privately-insured patients in the form of higher monthly premiums and copays). And of course, the taxes are based on income, not risk profiles.
- sschueller 9y agoLet's not forget the time GE sold its Swiss subsidiary to Hungary for 40k and back an hour later for 6,7 Billion to avoid paying taxes in Switzerland. [1] [1] https://www.tagesanzeiger.ch/wirtschaft/standard/Die-Steuerverwaltung-war-vollstaendig-informiert/story/21328250 https://www.tagesanzeiger.ch/wirtschaft/standard/Die-Steuerv...
- vkou 9y agoWhen I hear of accounting like that, my immediate desire is to see GE Switzerland nationalized, and its shareholders get paid $40K for it. That's what it's worth, right?
- ghostcluster 9y agoI am sad they got out off the light bulb business.
- matt4077 9y agoHave you seen the new crop of LED bulbs? The clear ones with the filaments visible are almost as brilliant as "traditional" clear bulbs, and the light is indistinguishable for me–all at 10% of the power usage of traditional lighting. I had avoided CFL bulbs for aesthetic reasons, but the advances of the last year have convinced me.
- digikata 9y agoDo you mean the 'filament' LED bulbs. It's a nice thing the manufacturers seem to have pulled off there, especially because it seems to have eliminated a whole set of power electronics at the same time. https://en.wikipedia.org/wiki/LED_filament https://en.wikipedia.org/wiki/LED_filament
- polskibus 9y agoIs the light spectrum continuous and is the bulb not flashing with very high frequency anymore?
- castis 9y agoNo, we have these at work and the LEDs are definitely controlled with a square wave. If you wave your hand back and forth you can see the strobe effect. Nice light bulbs but they'll still give you a headache.
- cmurf 9y agoI want the spectrum to be relatively flat, i.e. lacking the spikes that we see with most fluorescing materials. The flatter it is, the more well behaved it'll be compared to what our biology is designed for: black body radiators. Also, the aging profile is important. Just because the thing won't stop working for 10 years is not what's important. If it starts color shifting in a year, which to date they do, that's pretty much shit. Try mixing and matching bulbs, it's horrendous.
- madengr 9y agoI’m glad my employer never merged with GE. IIRC it was blocked. Of course they still implemented much of the management BS, such as stack ranking (firing 15% of your workforce every year). I have no respect for a company that moves from manufacturing to the worst kind of finance; high interest credit cards.
- bostonpete 9y ago> they still implemented much of the management BS, such as stack ranking (firing 15% of your workforce every year) I believe GE scrapped this system in 2015.