In Depth: O’Reilly was Right? Maybe. But not the cause.

The Hollywood Reporter’s Paul Bond pens an opinion piece on GE’s Stock Price and Bill O’Reilly…

Despite the relentless nature of the tirades, there aren’t many on Wall Street who suggest O’Reilly has been the cause of GE’s free-falling stock. In fact, most experts dismiss it as partisan street theater, and they point out that shares of News Corp., parent of O’Reilly’s own network, also have been crushed.

The critics (and they are legion: Check out OReilly-Sucks.com to get a taste of the vitriol) have a point. But it’s also fair to note that News Corp. has outperformed GE in just about any time frame that begins on or after Sept. 7, 2001 — the day Immelt became CEO — and ended with Tuesday’s closing bell, even though GE rallied 26% in the past two days.

Since Immelt took over, GE stock has tanked 71%, compared with News Corp.’s 58% loss. So far this year, GE is off 53% to News Corp.’s 32% decline.

So detractors beware: As long as News Corp. keeps outperforming GE, criticism of O’Reilly and his stockpicking prowess will ring hollow.

Bond is usually a solid writer but this time he throws up a big air ball. To lay this all on O’Reilly or even hint that O’Reilly is the cause is vastly overstating things. There’s a thing or two that Bond doesn’t mention that affects GE far more than O’Reilly ever could and it’s also why a comparison of News Corp. stock price to GE stock price is lunacy.

The biggest drain on GE’s stock price has to do with GE’s Financial Arm, something Bond should know well since its been all over the news. News Corp. does not have that kind of a drain on its business (it has a totally different kind of drain…Rupert Murdoch’s obsession with newspapers and his willingness to overpay for them). To compare the two stock prices, given these circumstances, is a fool’s errand. It’s also why pushing an O’Reilly angle in GE’s stock price is at the very least a thin argument and at the very worst fool hardy.

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9 Responses to “In Depth: O’Reilly was Right? Maybe. But not the cause.”

  1. I saw this article and laughed out loud earlier today. I couldn’t believe they were serious.

    This should help Orally’s already overinflated ego expand considerably. Yikes.

  2. lonestar77 Says:

    He may not have been a factor but I got out of a mutual fund I was in that held GE. Also, I purchased a new home about 3 years ago and stayed away from all things GE – appliances, lighting.

  3. libertyandjustice Says:

    Yes Spud, GE has a financial arm which is the result of an acquisition/investment strategy to build it. Does that excuse a dismal stock and earnings performance? Isn’t it management’s job to manage sell/ buy businesses that will enhance share holder value instead of destroying value. The CEO is responsible for those decisions. If financial services business were not good to be in then someone’s judgment in buying/investing these was way off or just plain wrong. Quite a few of these financial acquisitions/investments were made by Jeff Immelt. In my book he is responsible or maybe I’m wrong and the Martians made him manage the company that way. If Murdock had bought a credit card company instead of the WSJ then I would say that he is responsible for that mistake, but he not done that. I guess he meant well, so in some peoples book, Immelt should not be held responsible. Well, then he should give back the 100 million he has made over the last 10 years or so. I thought he was paid to be brilliant and avoid these mistakes. (I’m a former shareholder)

  4. The CEO is responsible for those decisions. If financial services business were not good to be in then someone’s judgment in buying/investing these was way off or just plain wrong.

    This is essentially a philosophical argument regarding whether Immelt should have had the foresight to see what was coming and reduce GE’s exposure, exposure that was instigated by Jack Welch, Immelt’s predecessor. I don’t think there’s conclusive evidence to either prove or disprove that. Monday morning quarterbacking is always easier than gametime quarterbacking and it’s easy now to say Immelt’s an idiot for letting this happen. But the thing is the same can be said for all the traditional banks and investment banks. And almost nobody was complaining a year and a half ago. They were too busy making money to care.

    I’m not giving Immelt a free pass. I am saying that to beat up on him now a lot of people need to look in the mirror first. I’m also saying O’Reilly has little to do with that. He’s just taking advantage of the situation. More power to him. But call it what it is. Not what it is not.

    BTW, News Corp recently wrote down Dow Jones by 2 billion dollars so your point about the WSJ loses some of its lustre there…

  5. And you’re not getting me in an argument about executive compensation…or rather executive overcompensation. Because I agree and not just of Immelt but EVERYBODY regardless of industry or health of the business.

  6. libertyandjustice Says:

    Every company that has lost up to 90% of its share value has changed CEO’s!!! Thats a good thing! (it’s called accountability)

    High 57.8 low 5.87 -89.84% change

    But In Immelt’s case he is put on the government advisory board and keeps skating. (especially on CNBC)

    Some people don’t understand why?

    “This is essentially a philosophical argument ” BS!

    I guess politics don’t play a role in this! I’ve got some nice land in Fl. I would like to sell you!

    PS: Of course I hold Murdock responsible; However he has over performed the broader market. Your own post point that out.

  7. Yes, News Corp. has over performed the broader market by not sucking as much as other guys. That’s damning with faint praise to me…

  8. rodger584 Says:

    It’s interesting that such a long and poorly written article can generate such emotion.

  9. Bill O’Reilly can be credited for bringing some “not good things to light” about GE, but it is silly to say that he had much more than a smittering of investment influence.

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