General Electric (NYSE: GE)
A class action has been commenced on behalf of purchasers of General Electric (NYSE: GE) stock during the period between July 21, 2017 thru Oct. 20, 2017 (the “Class Period”).
The complaint charges General Electric, or GE, and certain of its current and former officers with violations of the Securities Exchange Act of 1934. GE is a globally diversified technology and financial services company that offers a wide variety of products and services, including aircraft engines, power generation, water processing and household appliances. GE operates along several segments, including: Capital, Healthcare, Aviation, Power, Oil & Gas, Renewable Energy, Energy Collections & Lighting, and Transportation.
The complaint alleges that throughout the Class Period, defendants made materially false and misleading statements and/or failed to disclose material adverse facts about the Company’s business, operations and prospects. Specifically, defendants failed to disclose that the Company’s various operating segments, including its Power segment, were underperforming due to order drops, excess inventories and increased costs, and as a consequence, the Company had overstated its full-year 2017 guidance. As a result of defendants’ false statements and/or omissions, GE shares traded at artificially inflated prices during the Class Period, with its stock reaching a high of close to $26 per share.
In early October, the Company announced that its CEO and Chairman, Jeffrey R. Immelt, would be stepping down months sooner than expected, that its CFO, Jeffrey S. Bornstein, would be “resigning,” and that several other executives were also “retir[ing].” Later that month, on October 18, 2017, The Wall Street Journal published an article that detailed the extent to which corporate spending had gotten out of hand under Immelt and the massive restructuring that was then underway under the new CEO, John L. Flannery.
Then on October 20, 2017, the Company announced its results for the third quarter of 2017, disclosing earnings per share (“EPS”) of $0.29, which fell well below earnings estimates of $0.49 per share. The Company also lowered its 2017 earnings expectations, lowering its EPS guidance to $1.05 to $1.10 from its previous guidance of $1.60 to $1.70. On the same day, the Company held a conference call to discuss its financial results. On the call, Flannery stated that the Company had been completing a review of its operations and that, “[w]hile the company has many areas of strength, it’s also clear from our current results that we need to make some major changes with urgency and a depth of purpose. Our results are unacceptable, to say the least.” On this news, the Company’s stock price fell nearly 7%, or $1.51 per share, over two trading sessions, to close at $22.32 on October 23, 2017.
If you are a current shareholder and purchased stock between July 21, 2017 thru Oct. 20, 2017 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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