Otis Singleton
General Electric (GE) recently completed a three-way split, marking the end of the 132-year-old conglomerate. GE's journey began in 1892 when Thomas Alva Edison merged Edison General Electric Co. with a rival. Over the years, GE has touched various aspects of life, from electricity and appliances to financing mortgages. The three-way split resulted in the formation of GE Aerospace, GE Vernova, and GE Healthcare, each trading under separate stock tickers. This move was part of CEO Larry Culp's turnaround plan to address the company's struggles with weak profits, debt, and the impact of the 2008 financial crisis. The stock split aimed to streamline operations, improve cash flows, and enhance GE's position in the market.
| Characteristics | Values |
|---|---|
| Date of Stock Split | 2nd April 2024 |
| Number of Companies Split Into | 3 |
| Names of Split Companies | GE Vernova, GE Aerospace, GE Healthcare |
| Ticker Symbols | GEV, GE, GEHC |
| Date of Announcement | 2021 |
| Date of GE Healthcare Spinoff | January 2023 |
| GE Stockholders Record Date | 19th March 2024 |
| GE Stockholders Shares Ratio | 4:1 |
| Previous Stock Split | 1:8 reverse split |
| Date of Previous Stock Split | 2nd August 2021 |
| Stock Price | $185.67 |
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What You'll Learn
GE's three-way split
On April 2, 2024, General Electric (GE) completed its split into three separate publicly traded companies: GE Vernova, GE Aerospace, and GE Healthcare. The split marked the end of the 132-year-old conglomerate, which was once the most valuable U.S. corporation and a global symbol of American business power.
GE's healthcare business was the first to be spun off in January 2023, with GE HealthCare Technologies Inc. (GEHC) becoming a stand-alone publicly traded company. More than a year later, GE's aerospace and energy businesses completed the breakup, with both trading on the New York Stock Exchange as separate entities.
GE Aerospace, led by CEO Larry Culp, retained the iconic "GE" ticker symbol and focuses on aviation technology, such as airplane engines, generating more than 70% of its revenue from services. Analysts estimate its market value at over $100 billion, benefiting from a surge in demand for aftermarket services due to jet delivery delays by Boeing and Airbus.
GE Vernova, the energy unit, debuted under the ticker symbol GEV (GEV.N) and saw its shares rise about 5% in mid-afternoon trading. Stockholders of the former GE as of March 19, 2024, received one share of GE Vernova for every four shares they held in the parent company.
The three-way split was the culmination of CEO Larry Culp's efforts to turn around the company, which had struggled with weak profits, a mountain of debt, and the impact of the 2008 financial crisis that nearly bankrupted its most profitable business, GE Capital. Culp's focus on paying off debt, improving cash flows, and streamlining operations ushered in a recovery for the conglomerate.
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GE Vernova's trading debut
On Tuesday, April 2, 2024, General Electric (GE) completed its split into three publicly traded companies: GE Vernova, GE Aerospace, and GE Healthcare. GE Vernova, the energy division of the former conglomerate, made its trading debut under the ticker symbol "GEV" on the New York Stock Exchange. Stockholders of the former GE as of March 19 received one share of GE Vernova for every four shares they held in the parent company.
GE Vernova operates in the energy industry, providing a range of products and services for electricity generation, transfer, orchestration, conversion, and storage. The company has an extensive installed base, including over 7,000 gas turbines and approximately 55,000 wind turbines, and is a leader in electrification technology. GE Vernova serves a vital industry segment valued at $265 billion, which is projected to grow to $435 billion by 2030.
The spin-off of GE Vernova is part of a broader restructuring of General Electric, which was formed in 1892 through the merger of Edison General Electric Co with a rival company. Over the years, GE expanded into various industries, including electricity, appliances, and financing. However, by 2018, the company faced significant challenges, including weak profits, mounting debt, and the impact of the coronavirus pandemic on its jet engine business.
The decision to split GE into three separate companies was driven by CEO Larry Culp's efforts to turn around the struggling conglomerate. Culp, who became CEO in 2018, focused on paying off debt, improving cash flows, and streamlining operations. The split allows investors to focus on specific industries, such as healthcare, aerospace, and energy, without being intimidated by GE's size and diverse ventures.
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GE's ticker symbols
On 2 April 2024, General Electric (GE.N) completed its transition of splitting into three separate publicly traded companies: GE Vernova, GE Aerospace, and GE Healthcare. Each of these companies now trades under separate stock tickers.
GE's energy division, GE Vernova, started trading under the ticker symbol "GEV" and the GEV.N symbol on the New York Stock Exchange (NYSE). The longtime "GE" ticker is now attached to GE Aerospace, which focuses on aviation technology, such as airplane engines. GE Healthcare, which was spun off in 2023, trades under the "GEHC" ticker.
GE Aerospace shares were up about 2% at mid-afternoon on the day of the split, while Vernova rose about 5%. The split marked the end of the 132-year-old conglomerate, which was once the most valuable US corporation and a global symbol of American business power.
GE Aerospace's Investor Relations website at geaerospace.com/investor-relations and its corporate news website at geaerospace.com/news contain significant information about the company, including financial and stock price information for investors.
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GE's reverse stock split
On July 30, 2021, GE announced that it had completed a 1-for-8 reverse stock split of GE common stock. This reduced the number of outstanding shares of GE common stock from about 8.8 billion to approximately 1.1 billion. The reverse stock split was authorised by GE shareholders at the annual meeting on May 4, 2021, and GE filed an amendment to its certificate of incorporation, which was accepted for filing by the New York Department of State on July 30, 2021.
GE common stock began trading on a split-adjusted basis when the New York Stock Exchange (NYSE) opened on August 2, 2021. The stock continued to trade under the symbol "GE" on the NYSE, with a new CUSIP number (369604 301). On other exchanges, the stock traded under the symbol “GEC” on the London Stock Exchange, “GNE” on Euronext Paris, “GE” on the SIX Swiss Exchange, and “GEC” on the Frankfurt Stock Exchange, each with a new ISIN number (US3696043013).
A reverse stock split is undertaken by a company when it views its stock price as being too low. In a reverse stock split (such as 1-for-8), the number of outstanding shares is lowered, but the value of each share increases. This can be done to boost the share price and attract more investors. It may also be done to comply with stock exchange rules, as a company may need to reach a minimum bid price that a stock exchange requires.
The reverse stock split was part of GE's transformation into a more focused, simpler, and stronger high-tech industrial company. In addition to the reverse stock split, GE also planned to break up into three publicly traded companies: GE Vernova, GE Aerospace, and GE Healthcare. This breakup was completed in early 2024, with GE's aerospace and energy businesses beginning to trade on the New York Stock Exchange as separate entities, more than a year after GE spun off its healthcare business.
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GE's history and core business
General Electric Company (GE) is one of the oldest and largest industrial conglomerates in the United States. Founded in 1892 by Thomas Edison, it was originally a manufacturer of electrical equipment. Over the years, GE expanded into diverse areas, including aviation, computers, plastics, banking, and even television broadcasting. The company built the first U.S. jet engine in 1942 and later developed the most-produced jet engine in history, the J47, in 1949. GE has also been a leader in healthcare technology and renewable energy.
In recent years, GE has undergone a significant transformation, spinning off several of its businesses and divesting subsidiaries. In 2023, GE Healthcare, the company's health technology arm, was spun off as a separate entity. This was followed by the creation of GE Vernova, the energy company, through the split of GE's renewable energy and power businesses. The final spinoff was GE Aerospace, the aerospace company and legal successor of the original GE, which now focuses solely on aviation operations.
GE Vernova, headquartered in Cambridge, Massachusetts, has a global presence in over 100 countries and employs more than 80,000 people. Its mission is to deliver affordable, reliable, and sustainable energy solutions while helping to lead the transition to a decarbonized world. GE Healthcare, with its $18.3 billion business, is dedicated to advancing personalized and compassionate healthcare through medical technology, pharmaceutical diagnostics, and digital solutions.
GE Aerospace, the global aerospace leader, has an installed base of over 44,000 commercial and 26,000 military aircraft engines. With more than 52,000 employees, the company continues to innovate and push the boundaries of aviation technology, building on its century-long legacy. The completion of GE's three-way split in 2024 marked the end of the 132-year-old conglomerate, once a symbol of American business power, and ushered in a new era for its separate entities in aerospace, energy, and healthcare.
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Frequently asked questions
Yes, General Electric (GE) completed a three-way split in April 2024, breaking up the 132-year-old conglomerate.
The three new companies were GE Vernova, GE Aerospace, and GE Healthcare. GE Vernova's ticker symbol is GEV, GE Aerospace retained the original GE ticker, and GE Healthcare trades under the ticker GEHC.
GE's CEO, Lawrence Culp, believed the company was under-owned by investors due to its size and other ventures. The split was part of a restructuring process that began in 2015 to streamline the company and bring it back to prominence.
The stock split helped turn around the company, which was struggling with weak profits, debt, and the impact of the 2008 financial crisis. Under Culp's leadership, GE saw a 17% growth in revenues and a 264% increase in earnings in 2023.
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