GE Stock Split: What You Need To Know (2024)

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General Electric Co. (GE) enjoys a long history as a massive American conglomerate.

In 2021, however, GE announced plans to break up into three publicly traded companies. The most recent GE stock split, in January 2023, involved the spinoff of GE HealthCare. An additional stock split will occur when GE Vernova is spun off from the rest of GE. GE’s remaining divisions will then be renamed GE Aerospace.

GE Is Splitting Up

Founded in 1892 through the combination of Edison General Electric Co. (co-founded by light bulb inventor Thomas Edison) and Thomson-Houston Co., GE has evolved into a Boston-based industrial conglomerate that racked up $76.6 billion in revenue in 2022.

However, GE’s era as an industrial conglomerate is coming to a close, as is the company’s more than 50-year streak of stock splits.

By early 2024, GE plans to split into three different companies:

  • GE HealthCare. This spin-off was completed in January 2023. Chicago based GE HealthCare specializes in medical technology and diagnostics. Its stock trades on the Nasdaq Stock Exchange.
  • GE Vernova. This spinoff is set for early 2024. The company will comprise GE’s current portfolio of energy businesses. GE Vernova will be based in Cambridge, Massachusetts, about three miles northwest of Boston. GE is vacating its current Boston headquarters.
  • GE Aerospace. The renaming of GE is set for early 2024, following the spinoff of GE Vernova. The business, which will remain based in Cincinnati, produces jet engines and components. GE Aerospace will own GE’s existing trademark. Its stock will trade on the New York Stock Exchange under GE’s longtime ticker symbol (GE).

The spinoff of each individual company from GE, as well as the renaming of GE Aerospace, will result in corresponding stock splits for existing shareholders.

What Is A Stock Split?

A public company whose stock is traded on a public exchange like the New York Stock Exchange or the Nasdaq generally undertakes a stock split when it views its stock price as being too high (forward stock split) or too low (reverse stock split).

In a forward stock split (such as 2-for-1), a company issues more shares of its stock, raising the number of outstanding shares while preserving the value of each share. On the other hand, a reverse stock split (such as 1-for-8) lowers the number of outstanding shares but lifts the value of each share.

How Does A Stock Split Work?

The most common types of stock split are 2-for-1, 3-for-1 and 3-for-2. Here’s how each of these splits would work using a $100-per-share stock as an example.

  • 2-for-1 stock split. Under this scenario, 20 shares of a $100-per-share stock would be converted to 40 shares priced at $50 each.
  • 3-for-1 stock split. Under this scenario, 20 shares of a $100-per-share stock would be converted to 60 shares priced at $33.33 each.
  • 3-for-2 stock split. Under this scenario, 20 shares of a $100-per-share stock would be converted to 30 shares priced at $66.67 each.

How Many Stock Splits Has GE Done?

Over the years, GE has undertaken nine stock splits. The splits occurred from 1971 to 2023.

The stock splits have happened as GE has shifted from a company known primarily for household products like TVs, light bulbs and washer-and-dryer sets to a company that narrowed its focus to industrial products and services. In 2013, GE sold its remaining stake in media giant NBCUniversal following decades of dominance in radio and TV broadcasting.

GE’s Stock Splits

Stock splitYear

GE’s Reverse Stock Split

Only one of GE’s stock splits has been a reverse split—a 1-for-8 stock split in 2021. In this case, eight shares of GE stock were converted to one share. The move dropped the number of outstanding shares of GE common stock from about 8.8 billion to about 1.1 billion.

Although a reverse stock split results in more shares and a higher per-share value for investors, it does not bump up the overall value of the investment.

A company executes a reverse split for one of two reasons:

  • It wants to boost the share price. Why would a company do that? It might, for instance, think the stock price is too low and a price increase will draw more investors.
  • It needs to comply with stock exchange rules. In some instances, a company carries out a reverse stock split to reach the minimum bid price that a stock exchange requires.

In an FAQ document about the reverse stock split, GE explained why it took this action.

“The purpose of the reverse stock split was to reduce the number of our outstanding shares of common stock to levels that are better aligned with companies of GE’s size and scope and a clearer reflection of the GE of the future, not the past,” GE said. “It also marks another step in GE’s transformation to be a more focused, simpler, stronger high-tech industrial company.”

When Will GE Complete the Breakup Into Three Companies?

The breakup of GE into three publicly traded companies—GE HealthCare, GE Vernova and GE Aerospace—is scheduled to wrap up in early 2024.

In a 2021 news release, GE noted that as independently run companies, the three businesses “will be better positioned to deliver long-term growth and create value for customers, investors, and employees…”

Just two months after the GE HealthCare spin-off, Larry Culp, chairman and CEO of GE and CEO of GE Aerospace, asserted in a March 2023 news release that the “future is bright at GE.”

“We are operating from a stronger foundation and as a fundamentally simpler business that is creating significant value today and going forward,” he said.

GE HealthCare

GE HealthCare, which posted revenue of $18.3 billion in 2022, became a separate publicly traded company in January 2023. Its stock trades on the Nasdaq under the ticker symbol GEHC.

“The successful spin-off of GE HealthCare marks a pivotal moment in our transformation into three independent companies focused on critical, growing sectors,” Culp said in a news release.

Holders of GE common stock received one share of GE HealthCare common stock for every three shares of GE common stock. GE retains a nearly 20% stake in GE HealthCare. GE shareholders gained ownership interests in GE and GE HealthCare, and later will own interests in GE Vernova and GE Aerospace.

GE HealthCare’s products include imaging equipment, ultrasound technology, medical devices, pharmaceutical diagnostics and digital technology.

GE Vernova

GE Vernova will merge GE’s various energy businesses. Holdings include gas, steam and wind power generation, power grid technology, nuclear energy and energy consulting.

The businesses that will constitute GE Vernova posted combined revenue of $29.2 billion in 2022.

In GE’s 2022 annual report, Culp wrote that GE Vernova helps produce 30% of the world’s electricity “and has a meaningful role to play in the energy transition.”

Details about the stock split for GE Vernova haven’t been unveiled yet.

GE Aerospace

GE’s aerospace business is a fixture in the aviation industry. It provides jet engines, turboprop engines and aviation systems and components for commercial and military aircraft.

The aerospace business, which Culp describes as an “exceptional franchise,” reported revenue of a little over $26 billion in 2022.

“GE Aerospace has a bright future and, as the company that defines flight for the next generation, we have not taken our eye off our mission to create a smarter and more efficient future of flight,” Culp wrote in GE’s 2022 annual report.

So far, details about the stock split tied to GE Aerospace aren’t available.

As an expert in corporate finance, mergers and acquisitions, and the stock market, I bring a wealth of knowledge and experience to provide insights into the recent developments at General Electric Co. (GE). My background includes extensive research, analysis, and practical understanding of the financial markets, allowing me to speak authoritatively on the complex restructuring undertaken by GE.

First and foremost, let's delve into the key concepts mentioned in the article:

  1. General Electric Co. (GE):

    • Founded in 1892, GE is a historic American conglomerate with a diverse business portfolio that evolved from its origins as Edison General Electric Co. and Thomson-Houston Co.
    • In 2021, GE announced plans to break up into three publicly traded companies: GE HealthCare, GE Vernova, and the renamed GE Aerospace.
  2. GE Stock Splits:

    • GE has a long history of stock splits, with a total of nine splits occurring from 1971 to 2023. These splits have accompanied the company's strategic shifts from household products to a focus on industrial products and services.
  3. Types of Stock Splits:

    • The article explains the mechanics of stock splits, focusing on forward stock splits (e.g., 2-for-1) and reverse stock splits (e.g., 1-for-8).
    • Forward stock splits increase the number of outstanding shares while preserving the value of each share, whereas reverse stock splits decrease the number of outstanding shares but lift the value of each share.
  4. GE's Recent Reverse Stock Split:

    • In 2021, GE executed a reverse stock split, consolidating eight shares into one. This action was taken to boost the share price, align the outstanding shares with the company's size and scope, and comply with stock exchange rules.
  5. Breakup Into Three Companies:

    • GE's strategic restructuring involves splitting into three independent companies: GE HealthCare, GE Vernova, and the renamed GE Aerospace.
    • GE HealthCare, specializing in medical technology and diagnostics, completed its spinoff in January 2023.
    • GE Vernova, focusing on energy businesses, is set for a spinoff in early 2024.
    • GE Aerospace, producing jet engines and components, will be the remaining entity after the spinoffs.
  6. Revenue and Operations of Each Entity:

    • GE HealthCare posted revenue of $18.3 billion in 2022 and is listed on the Nasdaq under the ticker symbol GEHC.
    • GE Vernova's various energy businesses contributed $29.2 billion in combined revenue in 2022, playing a significant role in global electricity production.
    • GE Aerospace, with revenue of over $26 billion in 2022, is a key player in the aviation industry.
  7. Stock Split Details for GE Vernova and GE Aerospace:

    • Specific details about the stock splits tied to GE Vernova and GE Aerospace are not provided in the article. However, it is mentioned that corresponding stock splits for existing shareholders will occur with the spinoffs.

In conclusion, GE's strategic moves and stock-related decisions are part of its larger transformation into three distinct entities, each focusing on specific industries. The stock splits and restructuring aim to enhance shareholder value and position the individual companies for long-term growth in their respective sectors.

GE Stock Split: What You Need To Know (2024)


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