What is a reverse stock split and why did GE implement one?

A reverse stock split is a corporate action where a company reduces the total number of its outstanding shares by consolidating them. GE implemented a 1-for-8 reverse stock split, meaning every eight old shares were combined into one new share. Companies typically undertake this to increase the per-share market price, which can make the stock appear more attractive to investors, help meet stock exchange minimum price requirements, or reduce administrative costs associated with a large number of low-priced shares.

How does the reverse stock split affect my existing shares?

If you held GE common stock before the reverse stock split, your number of shares would have decreased by a factor of eight, while the price per share would have increased proportionally. For example, if you owned 800 shares at $1 per share, after the 1-for-8 reverse split, you would own 100 shares at $8 per share (assuming no other market changes). Fractional shares resulting from the split are typically handled by the company, often by rounding up or down or by paying cash in lieu of fractional shares.

Will the reverse stock split change the value of my investment?

In theory, a reverse stock split does not immediately change the total market value of an investor's holdings. The total value is the number of shares multiplied by the price per share. While the number of shares decreases and the price per share increases proportionally, the overall equity value remains the same at the moment of the split, barring any market reaction to the news.

What are the new trading symbols and identifiers?

Following the reverse stock split, GE's common stock began trading under new identifiers on August 2, 2021. On the New York Stock Exchange, it trades under the symbol 'GE' with CUSIP number 369604301. The stock also trades on other exchanges like the London Stock Exchange (symbol 'GEC'), Euronext Paris (symbol 'GNE'), SIX Swiss Exchange (symbol 'GE'), and Frankfurt Stock Exchange (symbol 'GEC'), each with the new ISIN US3696043013.

GE 8-K: Shareholder Matters

Summary

General Electric Company (GE) filed an 8-K on July 30, 2021, to announce the effectiveness of a one-for-eight reverse stock split for its common stock. This action also included a proportionate reduction in the authorized shares from 13.2 billion to 1.65 billion and a decrease in the par value per share from $0.06 to $0.01. The reverse stock split officially took effect upon acceptance of the filing on July 30, 2021. As a result of this reverse stock split, GE's common stock began trading on a split-adjusted basis on August 2, 2021, across major exchanges including the NYSE, LSE, Euronext Paris, SIX Swiss Exchange, and Frankfurt Stock Exchange. The company also made necessary adjustments to its registration statements, the 2007 Long-Term Incentive Plan, and outstanding awards to reflect the split. This move is typically undertaken to increase the per-share trading price of a company's stock, which can affect investor perception and compliance with exchange listing requirements.

Key Highlights

1GE implemented a 1-for-8 reverse stock split of its common stock, effective July 30, 2021.
2The total number of authorized common shares was reduced from 13,200,000,000 to 1,650,000,000.
3The par value per share of common stock was reduced from $0.06 to $0.01.
4GE common stock began trading on a split-adjusted basis on August 2, 2021.
5The company adjusted its registration statements and long-term incentive plans to reflect the reverse stock split.
6New CUSIP, ISIN, and trading symbols were assigned for the split-adjusted shares on various exchanges.

GENERAL ELECTRIC CO 8-K Report, Rights Modification (Jul 30, 2021)

Summary

Key Highlights

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