Monday, October 6, 2008

Shares of GE fall to 11-year low

PORTLAND, Ore. -- Shares of General Electric Co. hovered at around $20 Monday, the lowest point in more than 11 years as a sell-off pulled down broader markets.

The share price of the industrial and commercial conglomerate, a bellwether of the U.S. economy, has slid steadily since the financial crisis hit Wall Street last month. On Sept. 25, GE cut its earnings forecast for the year, blaming volatile financial markets damaging the profitability of its loan and lease business that accounts for almost half its income.

Last Thursday, share prices fell nearly 10 percent as GE announced an offering that was priced at a discount to the stock's closing price the previous day. GE priced 547.8 million shares at $22.25 each -- the same price GE extended to Warren Buffett, whose Berkshire Hathaway Inc. on Wednesday agreed to receive warrants to purchase $3 billion worth of common stock over the next five years.

The price for the $12.2 billion offering represents a 9 percent discount to GE's Wednesday close of $24.50.

Shares of GE lost $1.12, or 5.2 percent, to $20.45 in morning trading. The stock earlier fell as low as $19.69. GE last dipped below $20 on May 9, 1997 when shares traded at $19.42.

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