GE Shares Win Dubious Honor of Having Highest Volume in Market
(Bloomberg) -- One thing to notice about General Electric Co.’s beleaguered stock: it sure trades a lot.
The industrial conglomerate has seen 80 million shares changing hands each day this year, double the level in 2017, data compiled by Bloomberg show. It’s poised to end Bank of America Corp.’s seven-year reign as the most popular company in the S&P 500 by average volume.
These days, investor dollars go a lot further when it comes to creating volume in GE shares. Its low price -- about $13.70 as of this morning -- can also fatten margins for high-frequency market makers, many of whom make their living on penny spreads and gravitate to securities where 1 cent is a higher percentage of the money they put at risk.
“Think of Bank of America and Citibank back in 2008, where you had hundreds of millions of shares trading every day. Those were stocks trading at less than $10 at that time,” Art Hogan, chief market strategist at B. Riley FBR Inc., said by phone. “GE is falling into the category of low-cost trading vehicle that’s catalyst-rich.”
Those catalysts have lately been negative. The stock is down almost 60 percent in two years as Chief Executive Officer John Flannery sells off assets to cope with a crisis of cash shortfalls and lackluster results. GE is expected to say second quarter revenue was little changed from a year earlier, with earnings dropping for a fifth quarter when it reports results on Friday.
Through other lenses, GE has lost popularity. When ranked by the value of shares traded, GE falls to 17th place, with an average of $1.2 billion shares changing hands each day over the past six months. That’s just 15 percent of Amazon’s $7.9 billion, which tops the list.
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