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Your questions about the GE and Johnson & Johnson company breakups, answered

Published

4 years ago

November 19, 2021

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In this article

Cincinnati – Circa September 2021: General Electric Global Operations Center.

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Two major companies — General Electric and Johnson & Johnson — announced this month that they’ll be splitting up into multiple entities.

GE, priced at around $102 a share on Wednesday, will spin off into three separate businesses: energy, aviation and health care. Johnson & Johnson, trading at $163, will divide into one consumer company and another for pharmaceuticals.

If you’re one of the many Americans with your retirement savings or other money invested in one or both of the companies, here’s what you may be wondering.

Why is this happening?

Damien Conover, director of health-care equity strategy at Morningstar, said he found the news of Johnson & Johnson’s split-off surprising. The company, headquartered in New Brunswick, New Jersey, is famous for products like Band-Aids, Tylenol and baby powder.

“We don’t see any major catalyst for the move,” Conover said.

One hypothesis is that the company may be hoping to reduce the risk of litigation against its consumer company, after facing lawsuits over its impact on the opioid epidemic, as well as charges that the talc in its baby powder had led to cancer for some consumers.

(Johnson & Johnson told the Wall Street Journal that the lawsuits did not play a role in its decision to divide up the company.)

Meanwhile, GE, based in Boston and known as a maker of engines and turbines, among other products, has seen its performance suffer in recent decades. It’s likely hoping to regain steam by giving greater focus to its each of its core but very different sectors, experts say.

“It’s tough to manage such disparate businesses,” said Joshua Aguilar, equity analyst at Morningstar. “This gives each business the opportunity to make its own investment and determine its own destiny.”

When will the changes occur?

Johnson & Johnson expects its separation to be completed within 24 months. GE says its health-care spin-off should be in operation in early 2023, and its energy company in 2024.

What will happen to my stocks?

Current investors should get shares in the new entities.

These spinoffs are not totally unlike what happens when a company splits its stock, said Kelly Shue, a finance professor at the Yale School of Management.

“Your original stock is now a share in GE aviation, but you also get these special stock dividends,” Shue said. “You’re still going to own all three branches.”

What is different, however, is that with a stock split, you simply holding more stocks of the same company. Now you’re owning two — or three — different businesses.

Will I owe taxes?

Both firms say the change will be tax-free. Of course, as is always the case, selling any of the shares could leave you on the hook for capital gain taxes.

Should I do anything?

Institutional investors may do a good amount of trading once these companies split up, Shue said. That’s because they’ll now have a chance to pick and choose the parts of GE they want to own, and may feel more bullish on, say, energy than aviation.

But, Shue said, “I don’t think there’s a strong reason for individual investors to trade on this.”

Allan Roth, founder of financial advisory firm Wealth Logic in Colorado Springs, Colorado, agreed.

He has no plans to sell any of his GE shares, which are up nearly 90% from when he bought them, after the split. Too many of the predictions he’s seen have proven wrong.

“I can’t tell you how many business school case studies I’ve seen celebrating the brilliance of GE management and why they would always be dominant in any market they play in,” Roth said. As a result, he said, “I plan to do zero research and keep all three.”

“I’m smart enough to know that I don’t know if each component will be overvalued or undervalued,” he said.

Environment

Troubling times for Tesla, Nissan, and Dodge – plus some fun yellow stuff!

Published

3 hours ago

July 2, 2025

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Troubling times for Tesla, Nissan, and Dodge – plus some fun yellow stuff!

Tesla’s Q2 results are in, and they are way, way down from Q2 of 2024. At the same time, Nissan seems to be in serious trouble and the first-ever all-electric Dodge muscle car is getting recalled because its dumb engine noises are the wrong kind of dumb engine noises. All this and more on today’s deeply troubled episode of Quick Charge!

We’ve also got an awesome article from Micah Toll about a hitherto unexplored genre of electric lawn equipment, a $440 million mining equipment deal, and a list of incompetent, corrupt, and stupid politicians who voted away their constituents’ futures to line their pockets.

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Prefer listening to your podcasts? Audio-only versions of Quick Charge are now available on Apple Podcasts, Spotify, TuneIn, and our RSS feed for Overcast and other podcast players.

New episodes of Quick Charge are recorded, usually, Monday through Thursday (and sometimes Sunday). We’ll be posting bonus audio content from time to time as well, so be sure to follow and subscribe so you don’t miss a minute of Electrek’s high-voltage daily news.

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Drop us a line at tips@electrek.co. You can also rate us on Apple Podcasts and Spotify, or recommend us in Overcast to help more people discover the show.

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Environment

OpenAI says Robinhood’s tokens aren’t equity in the company

Published

5 hours ago

July 2, 2025

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OpenAI says Robinhood's tokens aren't equity in the company

Jaque Silva | Nurphoto | Getty Images

OpenAI is distancing itself from Robinhood‘s latest crypto push after the trading platform began offering tokenized shares of OpenAI and SpaceX to users in Europe.

“These ‘OpenAI tokens’ are not OpenAI equity,” OpenAI wrote on X. “We did not partner with Robinhood, were not involved in this, and do not endorse it.”

The company said that “any transfer of OpenAI equity requires our approval — we did not approve any transfer,” and warned users to “please be careful.”

Robinhood announced the launch Monday from Cannes, France, as part of a broader product showcase focused on tokenized equities, staking, and a new blockchain infrastructure play. The company’s stock surged above $100 to hit a new all-time high following the news.

“These tokens give retail investors indirect exposure to private markets, opening up access, and are enabled by Robinhood’s ownership stake in a special purpose vehicle,” a Robinhood spokesperson said in response to the OpenAI post.

BYD launches new discounts, offering +50% off smart driving tech

Published

9 hours ago

July 2, 2025

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BYD launches new discounts, offering +50% off smart driving tech

Despite the warnings, BYD continues introducing new discounts. On Wednesday, BYD’s luxury off-road brand began offering over 50% Huawei’s smart driving tech.

BYD introduces new discounts on smart driving tech

After BYD cut prices again in May, the China Automobile Manufacturers Association (CAMA) warned that the ultra-low prices are “triggering a new round of price war panic.”

Although they didn’t single out BYD, it was pretty obvious. BYD slashed prices across 22 of its vehicles by up to 34%, triggering several automakers to follow suit in China.

BYD’s cheapest EV, the Seagull, typically starts at about $10,000 (66,800 yuan). After the price cuts, the Seagull is listed at under $8,000 (55,800 yuan).

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It doesn’t look like China’s EV leader plans to slow down anytime soon. Fang Cheng Bao, BYD’s luxury off-road brand, introduced new discounts on Huawei’s smart driving tech on Wednesday.

The limited-time offer cuts the price of Huawei’s Qiankun Intelligent Driving High-end Function Package to just 12,000 yuan ($1,700).

Buyers who order the smart driving tech in July will save over 50% compared to its typical price of 32,000 yuan ($4,500).

Earlier this year, Fang Chang Bao launched the Tai 3, its most affordable vehicle, starting at 139,800 yuan ($19,300). The Tai 3 is about the size of the Tesla Model Y, but costs about half as much.

BYD-Tai-3-electric-SUV — BYD Fang Cheng Bao Tai 3 electric SUV (Source: Fang Cheng Bao)

The Tai 3 will spearhead a new sub-brand of electric SUVs following the more premium Bao 8 and Bao 5 hybrid SUVs.

BYD’s luxury off-road brand sold 18,903 vehicles last month, up 50% from May and 605% compared to last year. Fang Cheng Bao has now sold over 10,000 vehicles for three consecutive months.

The Chinese EV giant sold 382,585 vehicles in total in June, an increase of 12% from last year. In the first half of the year, BYD’s cumulative sales reached over 2.1 million, a YOY increase of 33%.

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