General Electric Company (NYSE:GE) shrugged off the inertia of the last two weeks to rally strongly and end the session with a solid 2.88% gain. The volume exploded to 60 million, against the average volume of 34 million and supported the price rise well. The rise came on the back of a rumor that General Electric Company (NYSE:GE) is selling a real estate portfolio valued at a huge $30 billion and an agreement on the transaction could be reached as soon as this Friday.
Simply the amount of $30 billion, if the deal really comes through, makes it the largest real estate sales deal since 2007, when the Equity office Properties Trust was acquired by Blackstone for $39 billion. This sale by General Electric Company (NYSE:GE) includes various commercial properties across the globe, including factories, malls, warehouses, apartment buildings etc.
General Electric Company (NYSE:GE) has been trying to return to its core business and sales like these are the steps towards that goal to simplify its business. It has been selling its financial business too, along with real estate for the last few years in its effort to get back to manufacturing. The total asset of the company is already down by 19% at the end of 2014, compared to the 2008 peak. The sold assets mostly consist of loans and leases. The upside of these steps is already showing. The net income of the company in 2014 reached $15.2 billion, 38% up from 2009.
Technically, the stock didn’t really go anywhere in the last 12 months as it primarily kept itself stuck in the range of $24-$27 despite some whipsaws out of the range here and there. The long term chart shows a bullish consolidation and no technical reason to get any bearish bias. A breakout above $27 would be the long term buy signal for the investors.