General Electric Co. [fortune-stock symbol=”GE”] is to get rid most of its GE Capital unit to create a “simpler, more valuable company” focused on its core industrial operations, in a landmark decision for both the company — and, perhaps, the economy too.
GE said it will shed over four-fifths of its in-house bank–the seventh-largest in the U.S.–over the next three years, drawing a thick line under the days when it depended on the freewheeling unit’s financial engineering skills to generate half of its profits.
For the most part, it’s going to give the money it gets for those businesses back to shareholders, mainly through a $50 billion share buyback program, the second-biggest in history. The company’s shares, which have badly lagged the S&P 500 over the last couple of years, rocketed over 8% early Friday, closing in on a seven-year high.
However, Moody’s Investor Service downgraded the company’s debt by…
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