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General Electric

Old 15th Aug 2019, 20:15
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Ecce Homo! Loquitur...
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General Electric

https://www.theguardian.com/business...s-fraud-claims

General Electric shares tank following accusation of ‘bigger fraud than Enron’

The whistleblower who called out Bernard Madoff’s Ponzi scheme has accused General Electric of wide-scale fraud in a move that has sent the conglomerate’s share price into a tailspin.

In a report titled General Electric, a Bigger Fraud Than Enron,investigator Harry Markopolos claims GE is engaging in accounting fraud worth $38bn. He said GE is heading for bankruptcy and is hiding $29bn in long-term care losses.

“GE’s $38bn in accounting fraud amounts to over 40% of GE’s market capitalization, making it far more serious than either the Enron or WorldCom accounting frauds,” he writes, referencing two of the largest corporate accounting scandals in history.

After a year long investigation for an unidentified hedge fund, Markopolos writes he has discovered “an Enronesque business approach that has left GE on the verge of insolvency”. Enron, a Texas-based energy group, filed for bankruptcy in 2001, brought down by a massive accountancy scandal.

This report is “going to make this company probably file for bankruptcy”, Markopolos told CNBC’s Squawk on the Street. “WorldCom and Enron lasted about four months … We’ll see how GE does.”........

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Old 15th Aug 2019, 20:27
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I'm sure the serried ranks of lawyers will do very nicely, thank you!
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Old 16th Aug 2019, 15:58
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Good to see someone with the acumen (and guts) to point out ‘The Emperor’s New Clothes’.

Are Airbus and Boeing entering the glider business???
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Old 16th Aug 2019, 16:25
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ORAC,
It looks like GE stock has rebounded today after yesterday’s loss resulting from Harry Markopolos’ revelations. The stock is now back up to $8.74 per share from a low of $7.65 yesterday. Apparently, his analysis dates back beyond Jeffrey Immelt’s tenure as CEO into the Jack Welch era. Larry Culp GE's new CEO bought ~$2 million worth of GE stock and most Wall Street analysts are defending GE.

The analysts’ responses are that financial conditions of GE that Markopolos is claiming are at best highly inaccurate. Markopolos also is claiming, according to a televised interview he gave, that GE will probably file for bankruptcy in 4 months, an outlandish claim given GE’s cash position and access to untapped funding.

Markopolos suffers from a conflict of interest that hurts his cause. He is in cahoots with an unnamed hedge fund that is shorting GE stock. He has admitted that he will share in the profits of this hedge fund's shorting effort if successful. He is obviously trying his best to make it successful. His personal reputation has take a hit and most of his claims as to accounting fraud have been or are being investigated by the Security and Exchange Commission.

Last edited by Turbine D; 16th Aug 2019 at 16:27. Reason: word correction
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Old 16th Aug 2019, 19:50
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We live about six miles south of the huge GE Aviation plant. This immense manufacturing facility makes more jet engines than any other on the planet. In 2016, 6.115 billion dollars in operating income was realized from 26.261 billion dollars in revenue. That same year saw 40,000 people employed - many Cincinnatians hope and pray that Mr. Markopolos' forecasts are figments of his (vivid and selfish) imagination. Disclaimer: my cousin was the chief quality control officer for GE aviation until he left to join Boeing South Carolina's 787 assembly operation in Charleston. Out of the frying pan and into the fire? Who can say!

- Ed
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Old 16th Aug 2019, 20:08
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I met General Electric when he was still a Major.
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Old 16th Aug 2019, 20:52
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Is he still current?
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Old 16th Aug 2019, 21:03
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Originally Posted by Turbine D View Post
ORAC,
It looks like GE stock has rebounded today after yesterday’s loss resulting from Harry Markopolos’ revelations. The stock is now back up to $8.74 per share from a low of $7.65 yesterday. Apparently, his analysis dates back beyond Jeffrey Immelt’s tenure as CEO into the Jack Welch era. Larry Culp GE's new CEO bought ~$2 million worth of GE stock and most Wall Street analysts are defending GE.

The analysts’ responses are that financial conditions of GE that Markopolos is claiming are at best highly inaccurate. Markopolos also is claiming, according to a televised interview he gave, that GE will probably file for bankruptcy in 4 months, an outlandish claim given GE’s cash position and access to untapped funding.

Markopolos suffers from a conflict of interest that hurts his cause. He is in cahoots with an unnamed hedge fund that is shorting GE stock. He has admitted that he will share in the profits of this hedge fund's shorting effort if successful. He is obviously trying his best to make it successful. His personal reputation has take a hit and most of his claims as to accounting fraud have been or are being investigated by the Security and Exchange Commission.
Markopolos had better be careful - if his claims turn out to be as baseless as it currently appears, he could easily find himself in trouble with the Feds for unlawful stock manipulation. People have gone to prison for less.
Disclaimer - I still have 200 shares of GE stock...
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Old 16th Aug 2019, 21:24
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Not to mention a suite for people's losses and possible defamation?
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Old 16th Aug 2019, 23:01
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There may be some truth in the story. more likely Goldman Sachs went short of the shares a year ago, bided their time then dropped the story with a back hander for the whistleblower..
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Old 18th Aug 2019, 04:09
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And CEO Larry Culp bought 252k shares.
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Old 18th Aug 2019, 06:21
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It's 180 pages and they show why GE is actually in worse condition that their reports show. Some reinsurance deals they need to fund with 29 billion more and they spent money earlier instead on share buybacks and dividends instead of allocating funds to cover these plans. And now it's possibly too late to do anything about...
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