GE Update (23-02-2009)

Is GE still a worthy infrastructure icon? Marketwatch issued a note today questioning the cost of GE's debt, particularly as compared to Citi's. 510bps versus 425bps. So who is at a greater risk in this market. My take is the Citi is in much worse shape than GE, but then that's based on the information readility available. And there are many that are saying the the "true" nature of the GE Capital balance sheet is not known. Immelt has been labeled as the perpetrator of crimes against GE. On the contrary, there are those that say even if GE Capital goes to zero that certaninly is not zero for all of GE. Surely there is not bailout for GE Captial, so why is their cost of debt higher than Citi's?

Maybe it has more to do with the real estate valuations? Or maybe its the huge amount of private label CC debt? Regardless of the source, stock closed the day at $8.85, its lowest value since 1995. Technical analysis seems to point to more downside. Fundamentals are still calling for a recognition of the underlying strength and the current stock price is not fair or a representative value. Or maybe has to do with nothing because in today's market the rules do not apply. This is a free-for-all. I'm still holding, and watching to see if this is a buying opportunity or crying one.

UPDATE (25-02-09): From CNBC a look at the historical support that GE might find - at $4-6? This is an eye opening read annd provides a different perspective of the continued view forward (GE: Staging A General Retreat).

And from SeekingAlpha.com, General Electric Market Cap Falls Below $100B.