General Electric (GE) is trading down another 5% today as it flirts with a share price below $8. It’s been as painful as it gets for GE and shareholders for the last two years. Since peaking just above $30 in mid-2016, the stock has been straight down. At its current level, the stock is just 55 cents (7%) above the price it closed at on March 9th, 2009 when the S&P 500 made its low of the Financial Crisis. Below is a price chart highlighting the destruction.
What makes the stock’s recent drop more painful than its drop in the mid-2000s is that this time around the rest of the market has been surging. Below is a relative strength chart of GE compared to the S&P 500. When the line is rising, the stock is outperforming the S&P 500, and vice versa for a falling line. As shown, relative strength for GE versus the broad market has plunged to new multi-decade lows.
Below is a table showing the worst performing current S&P 500 members since the March 9th, 2009 low for the S&P 500. (This is a simple price change and doesn’t include total returns.) As shown, GE is the 13th worst stock with a gain of just 7.45%. There are actually nine current S&P 500 members that are down since 3/9/09, so at least GE is still up!
Once the largest company in the world, there are no worries about bankruptcy for General Electric. In terms of investor psyche, this would likely have a major impact on the broad market.
