Jack Welch, Fabulous? Dow outperforms GE from his start
Has anyone else noticed that Jack Welch’s impeccably run company has stock worth less than it was 16 years ago? If you had bought stock on May 7, 2000 — one day before the split 3 for 1 — and kept it all, you would now be worth less half of what you paid. (Right now GE is at 7 and change, and was at 52 right before the split.
I’ve been wondering whether or not GE’s spectacular rise didn’t have more to do with GE Capital. (Disclosure: I once worked as a consultant to an IT contractor working at a company that was later merged into GE Capital.) They certainly made a lot of money in the Internet bubble and then in housing.
Take a look at this chart from Yahoo! Finance showing GE from 1981 (Jack’s CEO begins) to today, with annotations of what the increases were. The stock price multiples do not take into account stock splits, and probably should. So it goes.
March 2, 2009 No Comments
