The selling finally stops in GE as shares rebound after 12 percent two-day dive
- GE shares plummeted after the company announced restructuring plans and a 50 percent cut to its dividend.
- The 125-year-old company rebounded back above $18 a share Wednesday, up more than 2 percent.
Maybe the worst has passed for General Electric, after the company's stock dropped more than 12 percent in two days and it had its worst trading day since 2009.
GE rebounded above $18 a share Wednesday after falling as low as $17.50 earlier in the session.
The trouble started Monday after the company announced that it would slash its quarterly dividend by 50 percent, to 12 cents per share. Things got worse for the New York-based conglomerate when investors recoiled from a restructuring plan proposed by CEO John Flannery, who replaced Jeff Immelt in August.
The "turnaround plan fell short of the sweeping reset of the business model/portfolio many had hoped for," RBC analyst Deane Dray wrote in a note to clients Tuesday. "[There are] few reasons to believe the stock bottoms here."
But maybe investors finally believe GE offers some value.
We are "sticking with a buy despite a disappointing outlook," Bank of America Merrill Lynch analyst Andrew Obin wrote in a note to clients on Tuesday. "We believe that GE has significant cost cutting opportunities under the new leadership. We note that the company has undergone a significant reinvestment cycle, positioning the company well from a competitive standpoint."
GE shares are the worst performer in the Dow Jones Industrial Average this year by far, down 42 percent. The next biggest loser is Verizon, which is 17 percent lower for 2017. On Wednesday, GE stock was the best performer in the benchmark.