GE's Capital 'Permanently Impaired' by M&A Pattern, First Eagle Says

The video discusses General Electric's (GE) recent sale of a business unit to Advent for $3.25 billion and questions whether GE is a value stock. The speaker explains why they have not invested in GE, citing poor capital allocation decisions, such as buying high and selling low, which have weakened GE's financial position. Despite low stock prices, these issues have deterred investment due to the permanent impairment of capital and a weakened balance sheet.

What recent financial move did GE make involving Advent?

• GE invested 3.25 billion dollars in Advent.

• GE acquired a new business unit from Advent.

• GE sold a business unit to Advent for 3.25 billion dollars.

• GE merged with Advent to form a new company.

Why might value investors be cautious about investing in GE?

• GE's stock prices are too high.

• GE has a strong capital structure.

• GE has a consistent pattern of high returns.

• GE's capital allocation and structure have been problematic.

What has been a significant issue with GE's financial strategy?

• Avoiding any business acquisitions.

• Buying high and selling low, leading to capital impairment.

• Maintaining a strong balance sheet.

• Consistently buying low and selling high.

How has GE's pattern of financial decisions affected its capital?

• It has strengthened GE's capital.

• It has increased GE's capital reserves.

• It has led to a permanent impairment of capital.

• It has had no impact on GE's capital.

What is a consequence of GE's financial decision-making pattern?

• Increased stock prices.

• Weakening of their balance sheets.

• Improved investor confidence.

• Strengthened balance sheets.