General Electric Company (NYSE: GE) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company released two bits of news, one about an asset sale and the other about a launch in the IOT space. Today, we’ll talk about:
- The news;
- what we’re seeing from GE stock as a result; and
- what we’ll be watching for ahead.
GEAnnounces Asset Sale And Launch
As mentioned above, General Electric is having a strong day in the market today after announcing two bits of news. The first bit of news announced had to do with an asset sale. In a press release, the company said that it plans on selling its majority stake to ServiceMax, a leading provider of cloud-based software productivity tools, to Silver Lake.
In the release, GE said that it will retain 10% ownership equity in ServiceMax, a company that it acquired back in 2016. In a statement, Kenneth Hao, Managing Partner and Managing Director at Silver Lake, had the following to offer:
Field Service Management is a core element in the digital transformation of industrial operations, and ServiceMax’s innovative platform provides field technicians with next-generation, business-critical software and technology… We look forward to working with ServiceMax and GE to bring ServiceMax’s technology to a broader customer base, increase investments in product development and help the company achieve its long-term potential.
In other news, GE also announced a launch. In a second press release issued this morning, the company said that it plans on establishing a new, independent company that focuses on building a comprehensive Industrial IoT software portfolio.
The company said that the new company will start with $1.2 billion in annual software revenue and an existing global industrial customer base. Once launched, the company will be wholly-owned by GE but independently run with a new brand and identity.
GE said that the proposed new organization will bring together its Industry-leading IIOT solutions including the Predix platform, Asset Performance Management, Historian, Automation, Manufacturing Execution Systmes, Operations Performance Management, and the GE Power Digital and Software Solutions businesses.
In a statement, H. Lawrence Culp, Jr., Chairman and CEO at GE, had the following to offer:
As an early leader in IIoT, GE has built a strong business with its industrial customers thanks to deep domain knowledge and software expertise… As an independently operated company, our digital business will be best positioned to advance our strategy to focus on our core verticals to deliver greater value for our customers, and generate new value for shareholders.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to work in the market is that the news leads to moves. In the case of General Electric, the news was overwhelmingly positive. After all, the asset sale will bulster the balance sheet while allowing the company to focus on other initiatives while the new launch will enable the company to have a larger presence in the Industrial IoT space. So, it’s not surprising to see that excited investors are pushing the stock up in the market this morning. As is normally the case, our partners at Trade Ideas were the first to alert us to the gains. Currently (7:28), GE is trading at $7.37 per share after a gain of $0.66 per share or 9.84% thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the iWatch Markets team will continue to keep a close eye on GE. In particular, we’re interested in following the story surrounding the company’s asset sale and the launch of the new business in the IoT space. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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