GE rises on rumour of Buffett interest

Stock up 4.3% on unconfirmed report

It started swirling through the markets early in the morning. One trader after another passed it on, irrespective of whether there’s any truth to it: Warren Buffett, they said they had been told, was apparently interested in buying a stake in General Electric Co.

Hours later, there’s still zero indication that the speculation is anything beyond just that, but the market reaction is real: Shares in the faltering industrial powerhouse soared as much as 6.4 per cent, the biggest one-day advance since October 2015.

For beleaguered investors, it was, if nothing else, a welcome reprieve from what’s been a brutal 15 - month stretch of grim news — from tumbling demand for GE’s gas turbines to a probe of the company’s accounting by the U.S. Securities and Exchange Commission. That’s made GE the worst performer on the Dow Jones Industrial Average since the end of 2016, wiping out almost US$ 168 billion in shareholder value in the process through Monday.

Nicholas Heymann at William Blair & Co. said investors reacted to the speculation today in part because it seems like “a plausible theory, given Buffett had recently spoken to the press that he might be interested in GE at the right price.”

GE declined to comment. Buffett’s Berkshire Hatha

way Inc. didn’t immediately respond to a request for comment.

GE shares climbed 5.9 per cent to US$13.65 at 1:27 p.m. in New York. A day earlier, the shares fell to the lowest since July 2009. GE closed at US$13.44, up 4.3 per cent

Buffett has been an investor i n GE before. He helped inject capital into the industrial giant during the 2008 financial crisis by buying US$ 3 billion in preferred shares, and received a common-stock holding once some warrants expired years later. Berkshire has mostly sold that stock, Buffett said in February.