US: Concern over General Electric shares slump

[Naveed Yaseen]

BOSTON: Investors are growing increasingly frustrated with the continued slide in shares of General Electric Co, which this week touched their lowest point since late 1995 approaching the $10 level. The US conglomerate’s stock has lost almost 70 per cent of its value over the past year, and in a sign that the slide may continue JP Morgan on Friday cut its target price for the shares to $9.

While the current severe economic downturn has hammered stocks around the world, some investors said they are growing concerned that GE Chief Executive Jeff Immelt is not taking aggressive enough action to respond.

“It’s been a little too much business as usual and not enough decisive, bold action,” said Peter Sorrentino, senior vice president and portfolio manager at Huntington Asset Advisers in Cincinnati, Ohio, which holds GE shares. “Status quo at this point in time is not good.”

Like many GE shareholders, Sorrentino had watched GE shares lag the broader market prior to the current downturn and assuaged his concerns with the thought that its diverse lineup of businesses, from railroad locomotives to lending to NBC Universal media, would help it weather a downturn.

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