4.4 • 3K Ratings
🗓️ 10 April 2015
⏱️ 39 minutes
🧾️ Download transcript
GE announces a $50 billion share buyback. Royal Dutch Shell agrees to buy BG for $70 billion. And LinkedIn buys online education site Lynda.com for $1.5 billion. Our analysts discuss those stories and share some stocks on their radar. And New York Times money columnist Ron Lieber talks about his new book, The Opposite of Spoiled: Raising Kids Who Are Grounded, Generous, and Smart About Money.
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0:00.0 | Everybody needs money. That's why they call it money. |
0:07.0 | From full global headquarters, this is Motley Fool Money. It's the Motley Fool Money |
0:20.2 | radio show. I'm Chris Hill joining me in studio this week from Million Dollar Portfolio, |
0:24.1 | Jason Moser and Simon Erickson and from Motley Fool Pro and Options Jeff Fisher. |
0:28.5 | Good to see you gentlemen. Hello Chris. Something's in the water because we have got a bunch of |
0:33.0 | mergers and acquisitions to get to New York Times columnists and best selling author |
0:37.2 | Ron Lieber is our guest this week. As always, we'll give you an inside look at the stocks |
0:41.0 | on our radar. But we begin this week with industrial giant general electric GE announced a major |
0:47.5 | restructuring which includes the sale of most of the assets in GE Capital, the company's |
0:53.0 | financing arm. GE is going to take that money and institute a $50 billion stock buyback |
0:59.5 | program and Simon, that would be tied with Apple for the biggest stock buyback plan |
1:04.2 | of all time, shares up more than 10% this week. You're the former GE employee at the |
1:11.1 | table. First, were you surprised by this announcement? No, I can't say that I was Chris. For years, |
1:19.2 | GE has acted as a money tunnel, if you will, where you've got kind of at one side of |
1:24.5 | this tunnel, the cash cow businesses. They're just continually turning out profits that are going |
1:29.0 | to the growth drivers of this business. The growth drivers being healthcare, aircraft |
1:33.5 | engines, stuff like that. And then the conduit between the between point A and B, was GE Capital, |
1:38.8 | which would loan these growth drivers of large capital expenditures for these businesses, |
1:44.2 | attractive interest rates that they could continue to grow. The problem was two parts with |
1:50.0 | this strategy. One is 2008 comes and there's a drawing up a financing and borrowing across the |
1:55.4 | market, so GE, which was behaving as a bank basically. That was a problem for a lot of companies. |
2:00.2 | Right. And GE stock price got pummeled for that. But then the other thing is when you're not |
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