Investors tracking the breakup of
General Electric
now know when the final spinoff will happen, as well as how much stock in Vernova—the company’s power-generation business—they will receive for each GE share.
Investors will have to do some math in the coming weeks, but when things settle down in a few weeks, the value of their holdings won’t have changed much.
Thursday evening, GE said GE Vernova will be spun off on April 2. GE shareholders will receive one share of GE Vernova for every four shares of GE held. That will result in GE Vernova having roughly 275 million shares outstanding. GE has about 1.1 billion shares outstanding, according to FactSet.
GE Vernova stock will trade under the symbol GEV. Shares should start trading on a “when issued” basis on March 27. That price will give investors some sense of where the stock will trade when the spinoff goes through.
Barron’s recently wrote that Vernova’s market capitalization could be $30 billion to $35 billion. That would work out to a stock price of roughly $110 to $125 a share based on 275 million shares outstanding.
That is only a rough guess. Shares might start trading for lower than that amount.
Shortly after the spinoff, investors will see two GE-related stocks in their portfolios: GE Aerospace and GE Vernova. GE Aerospace is keeping the stock symbol “GE.”
The price of GE Vernova will essentially be removed from the value of GE Aerospace shares. The trading history for GE Aerospace will be adjusted to reflect that, avoiding the huge drop that a spinoff would trigger in an unadjusted price.
GE Aerospace will be the stock with all of GE’s history. GE Vernova will have a trading history back to March 27. That is the same thing that happened to GE and
GE HealthCare Technologies
shares after GE spun off its healthcare division in early 2023, marking the first spinoff in CEO Larry Culp’s plan to turn around GE.
Regardless of the actual share prices, the value of the GE Aerospace and GE Vernova shares should be roughly the same as the value of an investor’s General Electric holdings before the spin. The value will just be split among two companies.
After the spin, of course, the value of each stock will change as investors evaluate each business separately.
GE stock was up 1.1% in midday trading Friday. The
S&P 500
and
Dow Jones Industrial Average
gained 0.5% and 0.2%, respectively.
Write to Al Root at [email protected]
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