One months ago, we reported that according to option markets, GE – whose stock prices and operations have been in turmoil recently- was expected to massively slash its dividend, by just over 40%.

And in this case, the market was accurate, because on Monday Morning, (formerly) iconic blue chip General Electric announced a 50% cut to its quarterly dividend ahead of an update on strategy later on Monday by John Flannery, chairman and chief executive. The stock divdend payout will be slashed to 12 cents per share from 24 cents currently, the lowest quarterly dividend since 2010 and a rare reduction for the more than century-old company, and follows a sharp plunge in the company’s cash flow generation.

Indicatively, the last time GE reduced its dividend was during the 2008-09 recession; in many ways today’s cut is more painful to shareholders as it is not due to broader economic conditions, but due to company-specific factors. The decision comes after a painful year for the industrial conglomerate, which historically was one of the most reliable dividend payers in corporate America according to the FT.

Which is not to say that the dividend cut was a surprise: GE stock has fallen by a third since the end of December and it has underperformed one of its main rivals, Siemens.

The reaction on the news suggested that the market was bracing for even worse news: GE shares briefly erased pre-market gains, then shot up nearly 2% after the dividend cut. And while the kneejerk reaction is institutions covering, the fate of the stock now depends on retail investors many of whom held it for its generous, and now cut in half, dividend.

CEO John Flannery said: “We understand the importance of this decision to our shareowners and we have not made it lightly. We are focused on driving total shareholder return and believe this is the right decision to align our dividend payout to cash flow generation.”

He added that “the dividend remains an important component of GE’s capital allocation framework. With this action and others that we will be discussing this morning, we are acting with urgency to make GE simpler and stronger to drive growth and create more value for our shareowners.