Will GE Stock Slide on Alstom Lawsuit?
NEW YORK (TheStreet) -- Shares of General Electric (GE) - Get Report are higher 1.37% to $30.26 Wednesday afternoon, as Alstom SA sues the Fairfield, CT-based digital industrial company for breach of contract, pertaining to the company's sale of its train-signaling business to the French rail transportation company last November, Reuters reports.
According to the complaint filed in Manhattan's district court, Alstom and General Electric have not been able to come to an agreement over whether their negotiated $800 million purchase price should be adjusted either up or down to account for working capital and net debt.
The lawsuit accuses General Electric of breaching its contract and causing unspecified damages to Alstom after the company refused to let its jointly designated independent accounting firm Deloitte settle their disputes. Instead, General Electric launched an arbitration proceeding with the International Chamber of Commerce business group, according to Reuters.
Alstom seeks to halt the arbitration process and force General Electric to let Deloitte settle the price adjustment issue, Reuters added.
The complaint was filed on May 13 but was not made public until last night.
Separately, TheStreet Ratings rated General Electric as a "hold" with a score of C+.
TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon.
Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
The primary factors that have impacted this rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks.
The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance and impressive record of earnings per share growth.
However, as a counter to these strengths, TheStreet Ratings also finds weaknesses including generally higher debt management risk, weak operating cash flow and poor profit margins.
You can view the full analysis from the report here: GE
