Summary
- Larry Culp and the new team at General Electric just got their first downgrade from a prominent analyst and its stock price performed accordingly.
- Mr. Culp is having his media problems and one reason for the cause of this is that he has not been fully open and transparent to shareholders and to markets.
- in effect, Mr. Culp has lost some of the support a new CEO is given in turnarounds, something that it will be very hard for him to revive quickly.
Monday, JPMorgan Chase & Co. analyst Stephen Tusa downgraded his future picture of the performance of the stock of General Electric Co. (NYSE: GE).
GE stock closed Monday at $9.49, down 5.2 percent from Friday. The low for the day, $9.15, down 8.6 percent.
It should be noted that four months earlier Mr. Tusa had upgraded the stock, even though he had promoted a bearish view of the stock for a long time.
Lot a lot of people, Mr. Tusa was modestly supportive of Larry Culp, the new GE chief executive officer, soon after he ascended into the top position at the company.
Mt. Tusa's comment on the change: "We believe many investors are underestimating the severity of the challenges and underlying risks at GE, while overestimating the value of small positives."
This comment represents the unease I have felt about Mr. Culp's accession and the treatment of the task that was facing him.
