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Data: FactSet; Chart: Axios Visuals

General Electric was the largest public company in the world in the early 2000s, a mighty conglomerate spanning everything from nuclear power plants to credit cards and daytime TV, but it's now worth less than companies you've may have never heard of, like Becton Dickinson or Crown Castle International.

  • In fact, according to new research from JPMorgan analyst Stephen Tusa, GE stock — once the classic "widows and orphans" investment — might be worth nothing at all.

What went wrong: Under Jack Welch, GE's chairman from 1981 to 2001, GE became increasingly imperial and financialized. Welch's successor Jeff Immelt continued those traditions — until the global financial crisis destroyed GE Capital's balance sheet along with its coveted triple-A credit rating.

  • Without GE Capital to smooth over the cracks, problems in GE's core businesses became harder to hide.

Immelt had two big ideas for how he was going to turn GE (or at least its share price) around.

  • The first was to buy Alstom, a troubled French power company. The acquisition cost GE $10 billion. The subsequent write-down was about $22 billion.
  • The second was share buybacks: Immelt spent more than $70 billion buying back shares during his tenure as CEO. That's more than GE's current market capitalization.

By the numbers: Tusa reckons that GE's core industrial business has an enterprise value of about $65 billion, based on the multiples its competitors trade at. Add on $6 billion for what's left of GE Capital, subtract $67 billion of liabilities, and you're left with about $4 billion in market cap.

  • A small decrease in the trading multiple, or a small increase in the amount of money that GE has to put aside to cover a set of disastrous long-term care reinsurance policies, and GE becomes effectively insolvent.
  • That's why JPMorgan no longer has a price target on GE.

The bottom line: At the heart of GE is its power unit. The jet engine business has been hit hard by the coronavirus pandemic, and the power-station unit overwhelmingly manufactures and services ways to turn carbon into electricity.

  • If the world gets greener, as it must, that's bad news for GE.

Go deeper: Wall Street Journal reporters Thomas Gryta and Ted Mann take a deep dive into the Immelt years in their new book "Lights Out: Pride, Delusion, and the Fall of General Electric."

Go deeper

13 mins ago - Health

First U.S. case of the Omicron variant identified in California

PhotoL Chip Somodevilla/Getty Images

The first U.S. case of the Omicron variant was detected in California, the Centers for Disease Control and Prevention confirmed Wednesday.

Driving the news: The confirmed case was detected in a traveler returning from South Africa who was fully vaccinated and has mild symptoms, the CDC says.

Supreme Court appears likely to roll back abortion rights

Abortion rights advocates and anti-abortion protesters demonstrate in front of the Supreme Court in Washington, D.C., on Dec. 1. Photo: Olivier Douliery/AFP via Getty Images

The Supreme Court on Wednesday seemed likely to weaken abortion rights and perhaps to let states ban the procedure altogether.

The intrigue: The court seemed likely to throw out the framework established in Roe v. Wade, but it wasn't clear whether a majority of the justices were inclined to overturn the court's precedents entirely.

Felix Salmon, author of Capital
Updated 1 hour ago - Economy & Business

How to meme a painting

Illustration: Megan Robinson/Axios

How can a physical artwork become an NFT? One new company has just spent $12.9 million on a Banksy in an attempt to try out a new way of converting the real into the virtual.

Why it matters: The art market globally sees volume of about $60 billion per year, almost all of which is trade in physical objects. Art-world insiders including former Christie's c0-chair Loïc Gouzer are on the lookout for ways to monetize physical paintings without necessarily giving up physical ownership of them.

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