General Electric CEO buys 60,000 shares of slumping giant
NEW YORK: General Electric chief executive John Flannery bought 60,000 shares of the slumping industrial giant this week after Wall Street panned the company’s turnaround plan, US securities filings showed.
Flannery, who ascended to GE’s top spot this summer, paid $18.27 each for the shares for a total of $1.1 million. The transaction took place on Wednesday, according to the documents.
Flannery on Monday unveiled a huge rescue plan that included cost-cutting, asset sales — including some of the oldest businesses — and investment in growth businesses such as aviation in a bid to reposition the iconic industrial giant.
But the company also slashed the dividend payment in half, and investors punished the company. Most analysts were disappointed with Flannery’s turnaround strategy, selling off GE shares on Monday and Tuesday.
Shares have fallen more than 40 per cent thus far in 2017, including a 10 per cent drop this week, due to weakness in the power and oil and gas industries.
Flannery is not the only prominent executive to step in and buy shares of his company at a vulnerable moment, a move usually seen as a sign of an executive’s underlying confidence in his company.
In February 2016, JPMorgan Chase chief executive Jamie Dimon spent more than $25 million to buy 500,000 shares of the giant bank when shares stood at around $53.