There is no cash for dividends let alone operating needs and debt which is coming due.
This is exactly why I sold the stock when it was between $30-32 and have not bought back in yet.
There is not enough cash to retire the corporate bonds that are coming due in 2019 and 2020.
There are no more short cycle businesses of any volume left to support the long cycle businesses and thus cash flow is negative.
Capital continues to have surprises.
Pension is underfunded.
This is why GE will sold more stock in Oil and Gas than the original run rate/ lock up plan.
This is why Transportation had the deal reworked for more cash and less stock ownership.
This is why the Healthcare deal is so heavily full of debt and pension.
This is why GE Water was sold.
This is why Intelligent Platforms had chunks sold off and sites like Salem set to close.
This is why Small and Specalty Motors was sold to Wolong. Also, why Peterborough Large Motors was closed and other sites set for closure along with the Solar business moved under Renewables.
This is why Lighting Europe and Automotive was sold to Tungsaram
This is why GE Capital Trade Payables Vendor Finance was Sold to MUFG Union Bank (Mitsubishi)
This is why the new HQ building is not being built.
This is why HQ’s have been reorganized and many layers of leadership have been removed. Examples of HQ’s Power Portfolio Gas Power, Energy Connections, Renewables, US Wind and Grid Solutions.
This is why the back office functions in Global Operations and IT are being sold off to Genpact and others.
This is why the Tax Department was sold to PricewatterhouseCoopers PwC.
This is why GE Digital Predix and other assets were sold or spun off.
At the end of the day 2 Jet Jeff’s decisions to buy and sell $100B in businesses with a net increase in corporate debt of $80B along with selling nearly all of the short cycle businesses has left the leadership with no other options but to sell businesses for cash flow.
Investors, employees and retirees have no real clue on how massive the transformation has been in the last few years and exactly what assets are remaining to generate cash flow in order to cover liabilities. What is now traded under the GE Stock Ticker is a shell of what was convered even a few years ago.
Excellent post by @XHzrRWD-1orb. Deserves its own thread.