The right move for GE
Peter Lynch wrote that once companies reach a certain size, their stock has very limited potential. A company like GE simply can’t double their earnings so how can the stock price double?
Here’s an interesting article on GE, a pretty boring stock that hasn’t done much in recent memory. The article recommends spinoffs and I think that’s the way to go – they often create immediate shareholder value.
For example I remember when Eaton (ETN) spun off Axcelis Technologies (ACLS). Eaton shares stayed the same and ACLS were gravy. I don’t see why the same couldn’t happen if GE spun off its real estate or finance parts.