Posts Tagged ‘General Electric’

General Electric (GE) is a giant of a conglomerate and surprisingly at a time when most financial firms are crumbling, GE Money is still showing profits. But, sooner or later the cash dearth is going to catch up and to challenge it, GE plans to raise around $12bn in cash through the sale of stock.

It will also allot preferential shares to Warren Buffett’s Berkshire Hathway to the worth of $3bn, at a discount. It may also allot a further $3bn, taking the total investment to $6bn. Buffett calls GE as the “symbol of American Business” and believes that it has a “staying power” to withstand the economic downturn. Buffett recently gave a similar financial backing to Goldman Sachs.

Warren Buffett may now be compared to J.P. Morgan, who took similar actions during the Panic of 1907. It seems that Buffett took the decision to invest such a huge amount within hours of a request from GE through his banker at Goldman Sachs.

GE is supposedly today’s only listed company that was also listed on the original Dow Jones index in the 19th century. It has survived various economic downturns in its hundred plus years of history and is most likely to survive a few more.

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