General Electric Company (GE)

[Porgie Tirebiter]

No real surprise, GE has been looking to shrink or spin-off GE Capital for several years now. And Immelt has said all along he was in favor of returning the cash raised to the shareholders. I guess the real news is this last 8-K lays out the plan.

But remember, it was the return of the GE Capital dividend back in 2012 that got the shares out of the teens and into the twenties. The last few years GE Capital has been contributing about 40% or so to the bottom line. How does GE replace that income after the spin-off? By expanding the industrial side by 40%?? Easier said than done.

Shrinking the shares by 15 to 20% (and that number is probably too generous) certainly helps, but it doesn't cut it.

Is a significantly smaller GE worth $30 a share?? I have my doubts.