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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

Scoop: Trump tells confidants he plans to pardon Michael Flynn

Photo: Alex Wroblewski/Getty Images

President Trump has told confidants he plans to pardon his former national security adviser Michael Flynn, who pleaded guilty in December 2017 to lying to the FBI about his Russian contacts, two sources with direct knowledge of the discussions tell Axios.

Behind the scenes: Sources with direct knowledge of the discussions said Flynn will be part of a series of pardons that Trump issues between now and when he leaves office.

Erica Pandey, author of @Work
4 hours ago - World

Remote work shakes up geopolitics

Illustration: Eniola Odetunde/Axios

The global adoption of remote work may leave the rising powers in the East behind.

The big picture: Despite India's and China's economic might, these countries have far fewer remote jobs than the U.S. or Europe. That's affecting the emerging economies' resilience amid the pandemic.

Trump gives Biden access to presidential intelligence briefings

Photo: Mark Makela/Getty Images

The Trump White House on Tuesday gave President-elect Biden access to daily presidential intelligence briefings, a source familiar with the matter tells Axios.

Why it matters: Trump has refused to share the briefs until now, as he continues to challenge the result of the election and declines to concede. The president's acquiescence comes as another sign that the transition to a Biden administration is taking place.

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