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Stock Strategist

What a Wells Notice Means for GE

It may not be as bad as it looks.


General Electric’s (GE) 8-K filing on Oct. 6 disclosed that the U.S. Securities and Exchange Commission issued a Wells notice on Sept. 30 for possible violations of securities laws. The shares dipped over 5% upon the filing, implying that the market feared a loss of over $3 billion. While the stock has nearly recovered, we believe the initial sell-off was an overreaction and therefore leave our $9.60 fair value estimate intact.

While we don’t believe GE has a legal duty to disclose Wells notices, we’re glad it did.

Joshua Aguilar does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.