Splitsville

Good morning, innovation architects. This is your Stock Market Rundown for April 9th, 2024. Thanks for joining me today. Let’s dig in:

TODAY’S TOP STORY: DIVIDE AND CONQUER

It’s the end of an era: iconic conglomerate General Electric is no more. That is, the business still exists, but there’s no longer a corporate entity named “General Electric”. 

The legacy GE just split into GE Vernova, which houses the gas power and renewable energy businesses, and GE Aerospace, which makes jet engines and other aviation components. (A third piece of the pie, GE Healthcare Technologies, was spun off back in 2023.)

To understand this corporate divorce, we have to rewind history. Like Jay-Z, Thomas Edison wasn’t just a businessman, he was a business, man. He founded GE to transform his innovations (like the electric light bulb) into millions of dollars in profits.

Over the decades GE became a sprawling conglomerate, owning everything from TV stations to real estate. But the business hit a wall when GE’s lending division imploded in the 2008 financial crisis, blowing a $2 billion hole in the balance sheet.

GE’s stock struggled for the next decade. Outsider Larry Culp was given the CEO job in 2018 to turn the business around, and promptly started selling off assets like the rent was due. 

The proceeds were used to pay down $100 billion of debt. Culp followed up the fire sale by breaking the company into pieces like a corporate KitKat bar.

So, after 131 years, General Electric is no more. Sure, the name is still emblazoned on microwaves and washing machines—but they aren’t made by GE. Rights to use the GE name on appliances were sold off to Chinese appliance company Haier back in 2016. Thomas Edison would be shocked.

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SO WHAT ELSE IS GOING ON?

• Victim of a recent Zoom layoff? Good news: the US labor market is tighter than dad’s jeans after Thanksgiving, with most laid-off workers having no problem getting new jobs. Yes, even with a philosophy degree.

• Thanks to refreshing some top-selling nameplates, Toyota's first-quarter sales were up 20%. In this economy, a RAV4 is looking sexier than a Porsche.

• Layoffs watch: Apple let go of 600 workers in California. Not a big whoop given they have 161,000 employees worldwide, but Apple’s known for never doing layoffs. I mean, this is a company that can sell a monitor stand for $999.

• US factory orders are on the rise. And you thought the only things made in the USA anymore were TikTok dances, Tinder profiles, and vegan burritos.

And that's a wrap on today, friends. Make sure to tune again in tomorrow morning. Yours in capitalism, The Axe

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