GE’s Transformation Continues. It’s Making Big Moves Today.

The industrial conglomerate also provided additional guidance for the coming year before its annual outlook call this morning. Notably, management expects single-digit growth in the aviation business this year. That’s good but the potential for a faster aerospace recovery looks likely with vaccines rolling out.

“We won’t be offended if [anyone] calls us conservative,” GE CEO Larry Culp tells Barron’s. Conservative is probably the right stance given some of GE’s internal and industrywide challenges of recent years.

GE also announced plans for an 8-for-1 reverse stock split. That will take the company’s shares outstanding to roughly 1.1 billion from almost 9 billion, resulting in a stock price of about $112 a share, from $14. A scan of GE’s peers shows stock prices roughly between $100 and $200 a share and share counts in the hundreds of millions. This move puts GE in the same ballpark as those peers.

On its own, the stock split isn’t a big deal. Still, it’s another sign of GE’s transformation.

Investors have certainly noticed how all these changes add up. GE stock is up 30% year to date and more than 150% from its pandemic-induced low. What’s more, shares are at their highest levels since Culp took over in late 2018.

—Al Root

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Vaccine Eligibility Falls to Age 50 in Some States as Vaccine Supply Surges

A dramatic increase in vaccine supply has led states to start making vaccinations available to people as young as 50 with no restrictions.

• Ohio will allow any resident aged 50 and up to get vaccinated starting Thursday, with Michigan following suit on March 22. Meanwhile, New York just expanded eligibility to those 60 and up starting Wednesday. And in Minnesota, vaccinations are so far ahead of schedule that adults of all ages could be eligible by late April.
• While nationally less than 10% of Americans are fully vaccinated, some states are doing better than others. Alaska, for example, has fully vaccinated 16% of residents versus just 7.4% in Utah, which expanded eligibility to anyone 50 and older on Monday.
• Reasons vary for why some states have vaccinated more of their residents. In Alaska, it has to do with extra vaccine allocations from the Indian Health Service for the state’s sovereign tribes. Alaska has received more than 400,000 doses, versus just 300,000 in North Dakota, which has roughly the same population.
• At least 37 states also allow residents of any age to get vaccinated if they have certain health conditions. The Centers for Disease Control and Prevention told Barron’s that “vaccine recommendations are meant to be fluid,” adding that “in many instances states have decided to expand or adapt CDC’s recommendations.”

What’s Next: The Biden administration said it will ship 15.8 million vaccine doses to states this week, plus another 2.7 million to pharmacies, up from around 8.6 million a week when Biden took office. The president has said there will be enough vaccine doses available for every American by late May.

—Janet H. Cho

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Disney+ Surpasses 100 Million Global Subscribers

Walt Disney CEO Bob Chapek said Tuesday that the company’s popular Disney+ streaming service has surpassed 100 million global paid subscribers—a key win after the company reported multibillion-dollar losses in 2020 due to the shuttering of theme parks, resorts and movie theaters during pandemic lockdowns.

• Launched in November 2019, Disney+ was an instant hit thanks to popular series like The Mandalorian. While the pandemic crushed the company’s legacy businesses, the $6.99-a-month service thrived, adding 13 million subscribers from early October to early December 2020.
• Chapek also told shareholders that its Disneyland Resort in Anaheim, Calif., which has been closed since March 2020, could reopen by late April. State officials said last week that theme parks and stadiums could start reopening on April 1.
• In a sign that box office returns are still hurting, Disney’s Raya and the Last Dragonfell short of expectations, pulling in $8.6 million in 2,045 theaters in the U.S. and Canada. The company didn’t disclose viewer data on Disney+, where subscribers are charged an additional $29.99 to stream the film.
• After losing $2.8 billion in fiscal 2020 year, Disney reported a surprise profit of $17 million in its 2021 fiscal first quarter. Bob Iger, who stepped down from his CEO role in February 2020, said Tuesday that he will leave his role as executive chairman at the end of the year.

What’s Next: Chapek has said Disney+ will release more than 100 new titles a year and could reach 230 million to 260 million subscribers by 2024. Netflix, by comparison, said in January it has 204 million paid memberships.

—Janet H. Cho

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T-Mobile Bucks Tech Industry Trend Toward Less Intrusive Ad Targeting

Even as pressure grows for tech companies to do more to protect user data, wireless carrier T-Mobile is stepping up plans to use customers’ personal online habits to target ads to them.

• Beginning April 26, customers of the nation’s number two mobile carrier with some 80 million customers will have to opt out from ads targeted to them based on websites they’ve visited or apps they installed on their phones, The Wall Street Journal first reported.
• While the company says no personally-identifiable information is shared with advertisers, privacy advocates have pushed back on the claim. “This type of data is very personal and revealing, and it’s trivial to link that deidentified info back to you,” Aaron Mackey, a lawyer for the San Francisco-based Electronic Frontier Foundation, told the Journal.
• By contrast, rivals AT&T and Verizon pool user data before sharing it with advertisers, while Apple is moving toward an opt-in model for ad targeting. Google announced last week that it would no longer use cookies or similar tracking technologies to target ads to users, although it will continue tracking users in other ways.

What’s Next: The big three telecom firms, including Verizon, T-Mobile and AT&T, will all hold investor days this week to discuss their outlooks. T-Mobile is expected to update analysts on the Sprint merger integration progress, which it has said will result in $6 billion in annual cost savings.

—Anita Hamilton

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SoftBank Injected Funds Into Greensill Before Collapse

Japanese conglomerate SoftBank Group’s potential losses related to its investment in Greensill Capital may be bigger than previously expected, according to a report from The Wall Street Journal.

• The Journal reported SoftBank’s Vision Fund put at least $400 million into the firm before the end of 2020. SoftBank declined to comment to Barron’s.
• The report, which cited people familiar with the matter, characterized the $400 million investment as a preventative measure after another firm SoftBank invested in was at risk of defaulting on a Greensill loan. SoftBank’s Vision Fund previously invested $1.5 billion in Greensill.
• Greensill, a London-based firm that focused on supply-chain finance, filed for insolvency protections earlier this week. Earlier this month, Credit Suisse froze $10 billion in funds that were critical to its operations, according to the Journal. German regulators also took oversight of Greensill’s banking unit.

What’s Next: Though Apollo Global Management had been engaged in talks for Greensill’s core business, the Journal reported on Tuesday that a bid from JPMorgan Chase and fintech Taulia for the firm’s customers has made a deal with Apollo less likely.

—Connor Smith

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Russia Slows Down Twitter Speed, Demands Removal of Forbidden Content

The Russian government ordered on Wednesday a general slowdown of Twitter’s connection speed, after what it called “systematic disregard of the requirement to remove content forbidden in Russia.”

• The restrictions will affect “100% of mobile devices and 50% of stationary devices,” telecom regulator Roskomnadzor said in a statement.
• An official quoted by the Interfax news agency said the slowdown will concern video and pictures, not text. It will remain in place until Twitter has removed the incriminated content.
• If Twitter “continues to disregard requirements of the law,” the Russian regulator said further sanctions could be taken, up to blocking the service altogether.
• Roskomnadzor alleges that since 2017, Twitter has failed to remove content “that encourages minors to commit suicide, as well as child pornography and information about the use of narcotic drugs.”
• Russian authorities had previously accused Twitter of harboring posts that illegally urged children to take part in anti-Kremlin protests.
• Twitter did not immediately respond to requests for comment, The Wall Street Journal indicated Wednesday morning.

What’s Next: The Russian regulator is only mentioning in its statement content that is also clearly banned in many other countries. But the warning may also worry the thousands of Russian users that have turned to the social network as one of the few conduits for free speech still available in the country.

—Pierre Briançon

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Commentary: Stock Trades Take Days to Settle. Unnecessary Risk Results. 

“The three-day delay creates the potential for the systemic failures that became visible in the recent meme stock trading saga”

At the height of the GameStop frenzy, the platform Robinhood had to restrict trading. The organization that cleared its trades had demanded it put up more capital. That’s a prime example of how the structure of the settlement system traps otherwise useful resources, says former senior Nasdaq executive Eric Noll.

“During those three days, risk is being carried by people other than the customers who made the trade,” Noll writes in a Barron’s commentary. The problem is inherent in the system known as T+2, under which trades settle on the trade date plus two days. 

Moving to real-time settlement could release up to $13 billion a day, according to the Depository Trust & Clearing Corporation. Doing so would be complex and expensive—and it should happen anyway, says Noll. “These reasons are all red herrings.” If anything good comes of the meme-stock saga, let it be this. 

—Matt Peterson

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Dear Moneyist,

My father and mother divorced about 40 years ago. My father moved out and purchased a home that is now worth approximately $900,000. The divorce agreement, signed by both parties, called for my father in his will to leave his home to my sister and I.

Fast forward to today, my father (an attorney) has been married to his third wife for almost 30 years. She and her 2 daughters moved into his home soon after they were married. My father is now 85 and has late-stage cancer. He informed me that he has placed his home in an irrevocable trust, with his third wife named as trustee.

His third wife will also receive all of his assets, valued at around $1.5 million, as well as 60% of his annual government pension payments for the remainder of her life. Believe it or not, this pension currently pays my father just over $200,000 annually, so his third wife will receive about $120,000 annually. The government is quite generous to some of its retired workers, and with taxpayers’ money.

My sister and I will split the proceeds from a life-insurance policy valued at approximately $1 million.

The third wife has not been on speaking terms with my sister or I for the past 25 years. Her focus has been on directing my father’s income, assets, and now substantial annual pension payments toward herself, her children, and her grandchildren. For 30 years, my father’s wife has been a materialistic and domineering force who worked hard to turn my father against my sister and I.

She has plenty of her own resources. Ten years ago, the third wife received an inheritance from her father of over $2 million. As they live off of my father’s pension and assets, the third wife’s inheritance from her father was invested and has now grown to $3.5 million. How do I know all of these facts? My father told me. He felt very guilty about the entire situation, and stated he wished he had not done as his third wife demanded.

I have the signed divorce agreement in my possession, and am wondering if, once my father passes, if I were to contest the irrevocable trust, is there a chance that my sister and I would be awarded the house?

Sincerely,

—Screwed Over, But Not Surprised

Read The Moneyist’s response here.

—Quentin Fottrell

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—Newsletter edited by Anita Hamilton, Stacy Ozol, Mary Romano, Matt Bemer