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GE Slumps Past Great Recession Low Toward Worst Price Since 1992

GE Slumps Past Great Recession Low Toward Worst Price Since 1992

(Bloomberg) -- General Electric Co. tumbled toward its lowest price in almost three decades as the coronavirus outbreak upends global economies and threatens the manufacturer’s nascent recovery under Chief Executive Officer Larry Culp.

The shares fell 12% to $6.23 a share at 11:34 a.m. in New York, dipping below their Great Recession nadir on a closing basis and putting GE on pace for its lowest price since 1992. GE has lost more than half of its market value in just over a month, wiping out strong gains in 2019.

While the deadly pandemic has wreaked havoc on global markets, battered supply chains and weighed on bottom lines of most companies, GE is in a particularly precarious position as the manufacturer has yet to fully find its footing after a bruising slump in recent years. Culp has said there’s still work to be done to repair GE’s ailing energy operations and address a heavy debt load.

GE Aviation, the engine-making division that had been one of the company’s strongest assets amid the slump, faces a new challenge from the dramatic decline in air travel caused by the coronavirus, Gordon Haskett analyst John Inch said this week in a note. Boeing Co. and its suppliers, including GE, have fallen sharply as the planemaker seeks at least $60 billion in aid from the U.S. government to help the industry get through the current slump.

While Inch doesn’t expect GE to face a liquidity crisis, any move to tap its existing $35 billion bank syndicate facility “would be viewed negatively by the market -- particularly given GE’s repeated assurances over the past year that all liquidity issues have been long since ‘put to bed.’”

GE hit its lowest closing price during the last recession on March 5, 2009, when the shares ended the day at $6.40. That was the worst close since Nov. 19, 1992.

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