The long-awaited General Electric (NYSE:GE) stock split is set for today as investors consider what the change means for the historic company.
General Electric is dividing into three independent businesses, fracturing its energy business from its two other major branches. Indeed, starting today, General Electric will become three standalone companies: GE Vernova (NYSE:GEV), GE Aerospace, and GE HealthCare (NYSE:GEHC).
GE Vernova represents the energy spinoff, which will begin trading under the “GEV” ticker on the New York Stock Exchange. While GE Aerospace represents, well, the aerospace division of the company, retaining the “GE” stock symbol. GE Healthcare actually fractured off from the other two back in 2023.
Of the three companies, GE Aerospace is valued the highest at $140 billion. Followed by GE Healthcare at $40 billion and then GE Vernova at $35 billion.
GE’s board of directors first approved the separation of the company’s Aerospace and Energy branches back in February. Per the terms of the split, shareholders received one share of GEV for every four shares of GE stock owned at the time of the distribution date.
GE Stock Slips Following Company Split
GE stock is unfortunately down on the news. Shares are in the red by about 18% heading into the afternoon, an even further decline from its once triumphant highs.
General Electric was actually created by Thomas Edison in 1892, long before it exploded into the world’s largest company in the mid-1990s.
Unfortunately, the company struggled to hold onto its success. GE suffered major losses amid attempts to expand in the early 2000s and was eventually bailed out by the U.S. government following the 2008 financial crisis. The company notably underperformed the market from 2011 to 2021.
With GE Vernova now leading the company’s transition into alternative and renewable energy, some investors have high hopes for the newly fractured business.
“We believe GE Vernova is poised to preserve its leading position within a small oligopoly in the energy transition,” noted Morningstar analysts.
On the date of publication, Shrey Dua 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 InvestorPlace.com Publishing Guidelines.
