According to CNNMoney, GE (GE-US)’s newly appointed CEO, John Flannery, has introduced a new strategic direction for the company, focusing on its core businesses in healthcare, power, and aerospace. The lighting division, once a cornerstone of the company, is no longer part of this vision.
Earlier this year, in July, GE announced its plan to sell its lighting business, which contributes about 2% to the company’s total revenue. Meanwhile, the performance of GE’s light bulbs has declined by 66% this year. For some investors, GE without its iconic light bulb business is akin to AT&T without telephones or GM without Chevrolet—unthinkable for a company with such a long legacy.
Last Monday, GE revealed that it will cut its dividend from $0.24 to $0.12 per share. While this move is expected to save the company around $4 billion annually, the stock price dropped sharply by 7.17%, closing at $19.02 per share—a five-year low. This year alone, GE’s stock has lost 40% of its value, and the dividend cut has further shaken investor confidence, prompting many to seek more profitable investment opportunities elsewhere.
A Brief History of GE
GE’s story began with Thomas Edison, who invented the incandescent light bulb in 1879. A year later, he established his own light bulb sales company, and in 1892, it merged with Thomson-Houston Electric Company to form General Electric as we know it today.
Starting in 1892, GE transitioned from handcrafted bulbs to machine-made ones. In 1906, engineer William Coolidge developed a durable, high-brightness bulb that was commercially available by 1911, marking a major milestone in lighting technology.
In 1935, GE’s light bulbs illuminated the baseball fields of Major League Baseball, and in 1938, they introduced fluorescent lighting. Then, in 1962, the first LED bulbs were developed, setting the stage for the next era of energy-efficient lighting.
By 2019, GE aimed to divest itself of the light bulb business entirely, signaling a shift away from its historical roots.
The Challenges of the Light Bulb Business
LED bulbs have been replacing traditional lighting for decades. Although GE's LED division performed well between 2007 and 2014, the future outlook for this segment remains uncertain. GE is now seeking business units that can deliver consistent growth, stable revenue, and strong cash flow—qualities that the aging light bulb division may no longer provide.
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