- GE is having a bad year, but new investors are gather to the stock in droves.
- The company is facing multiple headwinds due to the coronavirus pandemic.
- There’s chatter that the 128-year-old conglomerate is on the edge of bankruptcy.
General Electric (NYSE:GE) is having an unforgettable 2020. The stock is down nearly 50% year-to-date after mty at $5.48 per share Thursday, its lowest level in almost 30 years. But it’s not all bad news for the global industrial giant as babyish investors are bottom picking the stock.
GE Becomes Second Most Popular Stock on Robinhood
General Electric may be a 128-year-old visitors, but it’s the young people who are seeing the value in its shares. Robinhood, a platform whose 6 million customers are mostly millennials, reports that its owners flocking into GE.
Shares of the multinational conglomerate are owned by over 740,000 Robinhood users, good enough for a runner-up conquer in the popularity race. GE is just behind Ford (NYSE:F), a stock that is also having a nightmarish 2020.
A look at the ten most popular stocks on Robinhood suggests investors favor partnerships that have taken a nosedive this year. Except for Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL), all stores in the top ten are in a strong downtrend.
New investors may be fond of GE, but there’s no certainty that the love will be rewarded, considering that the traditional is facing headwinds in this time of crisis.
GE Is Succumbing to the Economic Fallout of COVID-19
Rumors are swirling in the investment life that it’s only a matter of time before General Electric files for bankruptcy. The reasons are quite obvious.
In April, the suite furloughed half of its engine manufacturing staff. With air travel nearly grinding to a halt, demand for GE’s jet engines has descended. GE’s Capital and Power segments are suffering due to the low-interest-rate environment and economic slowdown.
Trader activity is helping fuel bankruptcy chatter. One options vendor bet $1.5 million that GE would plunge another 20%. Aset analytics platform Macroaxis says that GE has a 51% incidental of facing financial distress in the next two years.
GE may be popular to young investors as they might see the stock as a strong buy on dip prospect. But there’s no telling how deep the dip might go. It’s possible that the company may not survive this crisis.
Disclaimer: This article exemplifies the author’s opinion and should not be considered investment or trading advice from CCN.com. The author holds no investment position in the surpassing mentioned companies.
This article was edited by Sam Bourgi.
Last modified: May 15, 2020 4:31 PM UTC