3 ms·
GE gained a lot of share price but the company long term value was crushed, now it's splitting into three companies. If you want a lot of short term goal peopl
by fatneckbeard 4y ago
GE gained a lot of share price but the company long term value was crushed, now it's splitting into three companies.
If you want a lot of short term goal people to make money pumping stock, this is a great way to go.
If you want to build long term value for shareholders it's absolutely one of the dumbest things you can possibly do.
- enkid 4y agoGE didn't just split into three companies. Before this current split it basically shedded entire industries worth of spin off companies. Short term thinking led to over commitment to financial services like annuities, which paid upfront but then they had to pay back more than they got in the first place. It also led to sales with steep discounts on maintenance contracts, once again gaining significant cash upfront at the cost of a long tail of costs. This was directly related to the competitive culture, where anyone questioning something bringing in cash was seen as risk adverse and unaggressive.