>> More pain for General Electric investors, Monday, as the once storied US industrial giant was forced to lower earnings for the past two years. The admission that something has been wrong with GE's accounting pummeled the stock to a seven year low. The punishment for investors has been relentless.
The stock is down 18% so far this year, after falling more than 50% last year. Reuters' Breakingviews columnist, Tom Buerkle, says GE is much weaker than investors thought. When former CEO Jeff Immelt passed the reigns to current CEO John Flannery.>> The past six to nine months has been a litany of things first, Immelt leaves earlier.
And then we had this long three month period of review of operations by Flannery. He was going to try and we were going have one blood letting and we're going to straighten up the company. And he's promised to sell off 20 billion in assets. It hasn't been the clean break that he hoped because new skeletons keep on turning up in the closets.
>> GE revealed, Friday, that it might be sued by the Department of Justice over sub-prime mortgages. And the Securities and Exchange Commission is investigating GE over the way they accounted for long-term service contracts. Buerkle wonders, how much more bad news will shareholders have to endure?>> They have great franchises in several key industrial businesses.
And this is still a company that's worth $25 billion, but that's fallen in half over the past year and a bit. So this is a much weaker company. And I think Flannery is getting closer to straightening it out, but it's far too early to say that they hit the bottom.
>> One move that might bring comfort, a planned shake up of the board of directors to include an accounting expert, and former aviation and industrial executives to help turn things around. Shareholders get to vote on the new board members in April.