What's going on?

You spend ages waiting for a bus � and then two come along at once. Industrial powerhouse General Electric�s stock just got a couple of pick-me-ups � lifting it 8% on Thursday.

What does this mean?

First, General Electric announced that it�d �spin off� GE Digital, its software-focused subsidiary, into an independent company. GE Digital will focus on developing �internet of things� tech for industrial firms, a market which could be worth over $176 billion globally by 2022. GE also agreed to sell ServiceMax � a cloud computing arm of GE Digital � to private equity investors, having only bought it in 2016.


Then, an analyst from investment bank JPMorgan who�s been a longstanding thorn in the General�s side appeared to offer an olive branch. In a Thursday report, he said it was now feasible that GE could turn its embattled business around. For two years, he�d (rightly, in hindsight) been advising investors to �sell� GE�s shares � but the new �neutral� rating reflects a more balanced stance.

Why should I care?

For markets: Progress without panic.

Back in November, GE�s CEO seemed to spook shareholders when he reminded them of the company�s �urgent� need to reduce its debt by selling assets. That suggested the company was in direr financial straits than investors had thought, and might therefore flog things on the cheap. Thursday�s announcement may now reassure investors that GE can slim down its byzantine structure without resorting to a fire sale.

For you personally: Not all investors should listen to analysts.

Analysts with a reputation for being right exert a powerful fascination over some investors, who slavishly follow their recommendations. Today�s change in rating could therefore encourage a number of investors who previously sold to return to GE�s stock party. But those fond of dividends will be in no rush to re-don their dancing shoes: they took their seats in October when GE cut its profit payout to a single penny per share.