Can Larry Culp Save the Day for General Electric (GE) Stock?

  • General Electric (GE) CEO Larry Culp will replace John Slattery as CEO of GE Aviation.
  • Culp will still hold the position as CEO of General Electric.
  • Shares of GE stock are down about 30% year-to-date (YTD).
Company breakups: The General Electric (GE) logo on a building
Source: Sundry Photography /

Shares of General Electric (NYSE:GE) stock are in the spotlight today after the company announced that CEO Larry Culp will become CEO of GE Aviation while still retaining his current position. Subsequently, John Slattery will step down and become the CCO of GE Aviation.

GE stock has slid about 30% YTD in light of the challenging economic environment and rising interest rates. Culp explained the following about the role changes in a statement:

“[T]he board and I decided it is the right time for me to take on this expanded role and work even more closely with the team to support our customers, meet the unprecedented demand ramp and prepare for GE Aviation’s future as an independent public company.”

Let’s get into the details.

GE Stock: Larry Culp to Become CEO of GE Aviation

In addition to Culp taking on the role of CEO, Rahul Ghai will become the CFO of GE Aviation and Russell Stokes will be in charge of commercial engines and services.

Last year, GE announced that it would split into three companies focused on energy, healthcare and aviation. In total, the separation will cost about $2.5 billion, including taxes and operational expenses. The healthcare spinoff will occur in 2023. Meanwhile, the energy spinoff (which will be tax-free) and aviation spinoff will occur in 2024.

GE is now finalizing the management teams to run these separate businesses. The company’s aviation arm is its largest source of profit, although it has dealt with significant supply-chain challenges this year. Customers like Boeing (NYSE:BA) and Airbus (OTCMKTS:EADSY) are currently planning to increase production as consumers return to travel.

Who Is Betting Big on General Electric?

Tracking institutional ownership is important, as these large shareholders provide liquidity and support for stock. During the first quarter, 1,488 funds reported owning GE stock, a decline of 163 funds from the prior quarter. However, the total number of shares held by institutional investors increased 0.65% to 746.13 million from Q4.

General Electric’s put/call ratio tallies in at 1.61, up from 0.95. This signifies investors own more put options against GE than call options, implying a bearish tone. As of Q1, the top GE stock shareholders are T. Rowe Price (NASDAQ:TROW), Vanguard and Capital Research Global Investors.

On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the Publishing Guidelines.

Eddie Pan specializes in institutional investments and insider activity. He writes for InvestorPlace’s Today’s Market team, which centers on the latest news involving popular stocks.

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