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No matter how Jeffrey Immelt spins this $15 billion worth of capital raising, it clearly smacks of a desperation move after Wall Street was losing confidence in the coglomerate's ability to perform. General Electric, of course, is the parent company of NBC Universal. The breaking news is that GE plans to sell $3 billion of "perpetual preferred" stock to Warren Buffett's Berkshire Hathaway, and plans to sell at least $12 billion of stock to the public. It's a similar deal to what Buffett did last week with Goldman Sachs, which not coincidentally arranged for this GE deal, too. GE's share price has not only been dropping in recent weeks but was sharply down 7% at one point today.
Here's how the stock has done over the past 6 months:
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As a GE stock holder I’d just like to say yay, Immelt finally did something to almost warrant his salary. Now let’s see if Buffet can convince him to fire Silverman and give Zucker a one way ticket back to the Shire.
Anyone else feel like we’re watching the bank run scene in, “It’s a Wonderful Life,” and Buffett is Mr. Potter buying up everything?
Can you say let’s make a deal SAG
Blackball Gavin,
You are 100% correct. SAG has GOT to strike a deal, they can not strike. If SAG strikes right now it would be the dumbest move EVER in the history of this business.
I have TV with a DVR on my trading floor. The ultimate thing I would like to record is CNBC the day GE meets Jesus. We could watch live all the anchors in panic mode while there life savings goes down the tubes. That is reality TV at its best! After all the hump job the anchors have done in the past after GE “beats by a penny” results deserves some karma realignment. GE is a company, not much different from a financial services company when you consider the type of leverage they employ. Some here may think I am a bit too harsh on GE but since when does company rated “AAA” by the rating agencies need to go out and raise money for 10%? We’ve seen these deals for the past year in many financial services companies with many of the prices on the deal broken to the downside shortly after.
Why fire Zucker? NBC just announced they’re bringing back the The Partridge Family.
That graph looks so similar to the “Zucker Curve” of success, though much less pronounced.
I recently read that one of the key problems right now are accounting rules that states that certain assets have to be “marked to the market” which means that they are valued on what the stock market is willing to pay for, and not on the value of the underlying assets.
A lot of the banks and companies that are being declared bankrupt have healthy cash flows. This is because their Mortgage Backed Securities are considered worthless on the market, even though well over 90% of mortgages are being paid, and that there is cash coming in.
Of the $200 billion set up to bail out Fannie Mae and Freddie Mac, they have yet to actually spend a penny. Because the vast majority of mortgages are still being paid.
A lot of people are demanding a reform of the accounting rules as a key to any “bailout” because it would stop a lot of the panicking.
I’m waiting for the GE stock to get low enough for me to seize control of NBC Universal with the change I found in my couch. That’s called using the panic to your advantage like Buffet.
If “marked to the market” is reversed then perhaps everyone who bought houses in the past 5 years can also have house prices reversed back to cost. Free markets usually the American way of capitalism.
To Blackball & Blackball Gavin (Polone?),
Clearly you are not actors and are thinking of your own greedy hides. I reiterate what I said in the coomments section of Ms. Finke’s SAG’s reaction to AMPTP’s rejection:
It’s Pretty simple: STRIKE!
All the episodic productions are fully committed. From my vantage point on the agent’s desk, film production is pretty healthy right now as well.
The way to get them (AMPTP) to play ball is through force. Straight up punch ‘em in the gut with as little telegraphing as possible. Knock the air out of them and the floor from beneath them.
Chaos and delays costing them huge sums of money will get them back to the table right fast I reckon.
Tell me I’m wrong. I dare you. Bad for business yes. Even worse for a entertainment investing conglomerates i.e. GE
Bad for actors? Can’t get worse. That’s their power!
I’m an agent. I still work for actors.
assets were marked UP with ‘marked to market’; the historical accounting rules are/were ‘lower of cost or market’; this is the more conservative route
the fact is that these subprime mortgages, with mortgages balances greater than the real estate value now, are ‘under water’, need to be written down, and on a ‘cash flow basis’ are worth far less than the nominal mortgage amount lent originally, and WAY, WAY far less than their MARKED UP ‘mark to market’. that is why the sudden crash. mortgages were marked up, and shouldn’t have been
also, the ratings agencies were asleep at the wheel and/or part of the collusion, because subprime loans, made without documentation (no doc) were rated top grade by the agencies.
and your 401(k) and pension fund invested in these crap shacks since they were investment grade rated
screw ge. they’re over the hill, now
Hey Gang! Hypothetical question: So let’s say that you’re a TV writer with a pilot pitch coming up at The Peacock Network.
Let’s say that pitch is happening next week. And let’s also say your last name isn’t Wolf, Kelly or Bruckheimer, which means your chances of selling something to ANY network are fairly small to begin with.
What I’m wondering is, have they just gotten a whole lot smaller? Hypothetically speaking?
I sure hope not. But any information is welcome.
There is a discussion at my investors place since Buffett bought into Goldman if he was making the same mistakes as Ben Graham… Others are saying that he is ever the astute investor… I think he is making a mistake personally… I would like to hear opinions as to why I am mistaken… there is so much unknown in the banking system…and the derivatives are unknown.. what am I missing… I am a loyal Buffett fan… but…..
Ok. Everyone does realize that NBCU is a very, very, small portion of the giant G.E., right? And you do know that compared to some other G.E. divisions, NBCU isn’t the cash-sucking parasite that drives G.E. stock down, right? I know it’s difficult to imagine, but there is a whole, wide world out there that has little to nothing to do with the entertainment industry.
Troy, I think you misunderstand my opinion
Now that SAG has an economic advantage (Whith stocks falling and no movies or Tv to show in the winter and Spring), SAG should ask for everything they want, they should hold tight and get it. Troy can sell out if he wants to, but I say use your advantage and negotiate.
IF tanning kings like Moonves don’t bite then Of course SaG should strike. I will not condone the ending of SAG’s exclusive union contract to do studio work.
SAG must stop the Producers from breaking the union.
AGIN I MEANT TO SAY SAG HAS AN ADVANTAGE. I SUPPORT AN STRIKE AND NEVER SELLING OUT. That is why I got happy when GE gets bad news. They should have made a fair deal months ago and are losing millions over pennies.