Understanding GE's Transformation: What Stock Splits Mean For Investors

The Mechanics Behind Stock Splits

When a publicly traded company believes its share valuation requires adjustment, it typically executes a stock split. This financial maneuver comes in two varieties: forward and reverse. In a forward split, the company increases its outstanding share count while maintaining total equity value—for instance, a 2-for-1 split transforms 20 shares at $100 each into 40 shares at $50 per share. Conversely, a reverse split reduces share quantity while raising per-share value, such as a 1-for-8 split converting eight shares into one.

Common forward split ratios include 2-for-1, 3-for-1, and 3-for-2. Using a $100-per-share stock as reference:

• A 2-for-1 split produces 40 shares valued at $50
• A 3-for-1 split yields 60 shares at $33.33 each
• A 3-for-2 split results in 30 shares priced at $66.67

These adjustments don’t alter the investor’s total portfolio value—they simply redistribute it across more (or fewer) shares.

GE’s Strategic Breakup Into Three Independent Entities

General Electric, founded in 1892 through the merger of Edison General Electric Co. and Thomson-Houston Co., has fundamentally reshaped its corporate structure. The Boston-headquartered industrial giant, which generated $76.6 billion in revenue during 2022, is transitioning from a sprawling conglomerate into three specialized, publicly traded companies by early 2024.

This transformation marks the conclusion of GE’s remarkable 50-plus-year streak of conducting stock splits. The company’s strategic pivot reflects its evolution from a household-name manufacturer of televisions, light bulbs, and appliances into a focused technology-driven industrial enterprise.

The Three Independent Companies: Timeline and Details

GE HealthCare already completed its separation in January 2023. This Chicago-based entity specializes in medical imaging, diagnostics, and digital health solutions, having generated $18.3 billion in revenue during 2022. GE HealthCare trades on the Nasdaq under ticker GEHC. Existing shareholders received one share of GE HealthCare for every three GE shares held. GE retained approximately a 20% ownership stake.

GE Vernova, scheduled for early 2024 spinoff, consolidates GE’s energy operations including gas, steam, and wind power generation capabilities, grid technology, nuclear operations, and energy advisory services. These combined energy businesses produced $29.2 billion in annual revenue during 2022 and reportedly generate 30% of global electricity supply.

GE Aerospace, renaming GE’s remaining operations in early 2024, maintains headquarters in Cincinnati while producing jet engines, turboprop systems, and aviation components for military and commercial applications. This division reported revenue exceeding $26 billion in 2022. CEO Larry Culp characterized it as an “exceptional franchise” poised for substantial growth.

GE’s Historic Track Record With Stock Splits

Since 1971, General Electric has executed nine stock splits, with only one being reverse in nature. The 2021 reverse split—a 1-for-8 ratio—reduced outstanding shares from approximately 8.8 billion to 1.1 billion. GE stated the reverse split aimed to “reduce outstanding shares to levels better aligned with companies of GE’s size and scope,” supporting its transformation into “a more focused, simpler, stronger high-tech industrial company.”

Looking Ahead: GE Stock Price Forecast 2025

With the planned completion of GE’s three-company breakup in early 2024, investors should anticipate continued volatility and adjustment periods throughout 2024 and into 2025. Each spinoff generates corresponding stock splits for shareholders, creating opportunities for portfolio rebalancing. The company’s simplified structure should theoretically enhance operational efficiency and shareholder value creation across all three entities.

According to GE leadership, the independent companies will be “better positioned to deliver long-term growth and create value for customers, investors, and employees.” Chairman and CEO Larry Culp emphasized in March 2023 that GE operates “from a stronger foundation” following the HealthCare separation, setting the stage for continued value generation as GE Vernova and GE Aerospace assume their independent roles.

The breakup represents one of the corporate world’s most significant transformations, fundamentally altering how investors interact with GE’s legacy businesses and positioning each successor company for specialization within its respective industry vertical.