The Incredibly Shrinking General Electric — Market Mad House

Daniel G. Jennings
5 min readNov 27, 2019

I advise those who fear today’s giant tech companies to examine the current sorry state of 20th Century tech giant General Electric (NYSE: GE).

GE was one of the most feared companies of the 20th Century. In fact, science fiction great Kurt Vonnegut was so scared of General Electric he wrote at least two novels about the company. To clarify, Vonnegut’s experiences as a PR man for GE in the 1940s and 1950s helped inspire Player Piano and Cat’s Cradle, Wired observes.

Today, however, nobody is afraid of GE. General Electric (NYSE: GE) stock; for example, was trading at $11.29 on 27 November 2019. Meanwhile, Mr. Market gave GE a $98.602 billion market capitalization on the same day.

Does Fear and Loathing Drive Stock Value?

In contrast, Mr. Market gave Alphabet (NASDAQ: GOOG), or Google, General Electric’s successor as the popular imagination’s corporate bogeyman, a market cap of $897.458 billion on the same day.

Moreover, shares of Alphabet (NASDAQ: GOOGL) traded at $1,312.99. Thus it could pay for a company to be feared and hated.

For instance, another hated company Amazon (NASDAQ: AMZN) had a market capitalization of $901.612 billion on 27 November 2019. Additionally, Amazon shares were trading at $1,796.94 on the same day.

One reason people buy Amazon and Alphabet stock is that they fear those companies. To explain, people who believe that a company is all powerful could think such a corporation can make unlimited amounts of money. Hence, those people have a strong incentive to buy that company’s stock.

Conversely, investors ignore General Electric (NYSE: GE) because they view that company as harmless. Therefore, it is good to be feared or hated by the public.

General Electric is Shrinking

General Electric’s financial numbers show the fear and loathing index could be an accurate gauge of a company’s profitability.

GE’s quarterly revenues; for instance, fell from $28.831 billion on 30 June 2019 to $23.60 billion on 30 September 2019. In contrast, General Electric’s quarterly profit margin rose from $5.765 billion on 30 June…

--

--

Daniel G. Jennings

Daniel G. Jennings is a writer who lives and works in Colorado. He is a lifelong history buff who is fascinated by stocks, politics, and cryptocurrency.