GE Shares Explode After Company Accelerates Baker Hughes Share Sale

Shares of General Electric were soaring on Tuesday and seeing their best day in three years after the company said it would be speeding up the share sale of Baker Hughes.

It was the best trading day for the stock since April of 2015 and comes at a good time since the stock fell below $8 a share recently. That was the first time GE shares went that low since the financial crisis nearly a decade ago.

Selling the Baker Hughes stock will bring GE’s stake to just over 50 percent in the oil field services company. This is down from 62.5%.

The company’s CEO Larry Culp said to CNBC this week that he feels there is an urgent need to lower GE’s leverage and he can do this through selling assets.

“The agreements announced today accelerate that plan in a manner that mutually benefits both companies and their shareholders,” Culp said in a statement.

“We like seeing GE’s new CEO Larry Culp hasten the pace of the company’s portfolio breakup to generate sale proceeds to de-lever the balance sheet,” wrote RBC Capital markets analyst Deane Dray to clients.

“This is consistent with GE’s messaging that it has roughly $60 billion of potential sources of liquidity.” Culp stated, “The agreements announced today accelerate that plan in a manner that mutually benefits both companies and their shareholders.”

GE said it will continue toward eventually selling its full stake in Baker Hughes.

Disclaimer: We have no position in General Electric Company (NYSE: GE) and have not been compensated for this article.