Let's start with the less-bad... 127-year-old General Electric isn't behind the app-tastic consumer tech you love – But it's big with big products. Really big. Like the kind of stuff entire countries and industries buy. Behold these numbers:
- 2/3 of all airplanes that take-off are flying on GE-made engines.
- 90% of "transmission utilities worldwide” are equipped by GE-made turbines.
GE is basically taking donations... The OG conglomerate has been mocked for mismanagement, accused of the largest accounting fraud since Enron, and its stock lost 75% of its value in 2 years. So to desperately raise cash, it's selling off its dearest assets like a 3rd grade bake sale. Now check out these numbers:
- It's sold off its transportation unit (trains) for $21B.
- And it's selling its oilfield services (Baker Hughes) for $2.7B.
- Yesterday, GE claimed the total amount it's selling off should raise $38B.
- But the company is only worth $80B, so it's selling off nearly half its value for cash.
- And that $$$ isn't going to invest in new projects: it's to pay down a whopping $105B in debt.
- Get this — GE owes so much more money that it has a negative net worth.
Pensions are GE's silent disadvantage... If you want to see how old GE is, look at its pensions: the regular payments it dishes out to its retired workers. The total it owes these GE-faithful is $27B, spending ~$1B per year on them. So while nimbler startups can invest in growth, GE is paying back its lenders and hooking up its city-sized population of retirees.