GE’s Larry Culp Posted an Open Letter on LinkedIn. He’s Talking to Investors.

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Larry Culp, Chief Executive Officer of General Electric.

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Christopher Goodney / Businesshala

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General Electric CEO Larry Culp rips a page from another CEO’s playbook-Teslaof Elon Musk—and took his message directly to investors on Monday.

Culp didn’t exactly mirror Musk—Culp posted on the career networking website LinkedIn and Musk is a Twitter (ticker: TWTR) devotee—but the aim was the same: to talk about his company without filters like mainstream media. .

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in his post, Culp laid out his outlook for General Electric (GE) in the months and years to come. He started with simply “Team”, addressing all of GE’s stakeholders. He is clearly adding investors to the group.

Culp is replacing GE. There is no other way to put it. In the three years since Culp took the reins, GE has paid off more than $80 billion in debt. And now it’s splitting into three companies—one dedicated to healthcare, one to commercial aerospace, and one to power generation.

Still, since GE announced the split in early November, shares have fallen about 11%. The S&P 500 and the Dow Jones Industrial Average are both down about 1% over the same period.

Investors are worried about the stock becoming dead money. The split won’t be wrapped up for nearly two years, giving investors a long time to wait for the valuation build-up that could come from the breakdown into three parts.

However, Culp is firm. “We are well on our way to becoming three stronger, more focused companies, positioned to lead the way in the critical high-growth sectors of aviation, healthcare and energy,” he wrote in his post.

The last thing Culp wants, of course, is for investors to leave the stock between now and the split. “Our continued deleveraging and scaling of lean company-wide will further strengthen our financial position and allow GE to take more offense through organic and inorganic growth opportunities,” he said. Acquisitions and more changes are possible between now and the time Spin flourishes.

Wall Street analysts are supporting Kalp in the dead-money debate. About 70% of them buy shares by covering rate shares. The average buy-rating ratio for stocks in the S&P 500 is approximately 55%.

The average analyst price target is around $120 per share, which is up 20% from the price over the past few days. Analyst target prices have increased by an average of about 11% over the past year.

The sell-off has left investors with shares a little more cushioned than usual since the split was announced.

Write to Al Root at [email protected]


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