By Scott Malone
BOSTON (Reuters) - An offering of 547.83 million shares of General Electric Co
GE shares tumbled more than 9 percent to $22.26 in early trading on the New York Stock Exchange, but remained above the 52-week low of $22.19 set in September.
GE said on Wednesday it planned to raise $12 billion through a common stock offering to boost liquidity and give it more of a chance to make opportunistic acquisitions during a time of financial market turmoil.
"They were unable to fill the book at a regular price closer to yesterday's close. That discount seems somewhat steep," said Jason Small, assistant portfolio manager at Chartwell Investment Partners in Berwyn, Pennsylvania, which manages about $5.5 billion in assets and holds GE shares.
The Fairfield, Connecticut-based company is also selling $3 billion of preferred stock to Warren Buffett's Berkshire Hathaway Inc
GE's shares have plummeted 39 percent so far this year -- almost double the slide of the Dow Jones industrial average <.DJI> and Standard & Poor's 500 index <.SPX> -- as the global credit crunch has hurt its hefty finance arm, offsetting growth in the company's infrastructure business. The conglomerate last week warned Wall Street that profit could be down as much as 12 percent this year due to the troubles at GE Capital.
The company is trying to scale down its exposure to the financial sector, with a goal of relying on GE Capital for just 40 percent of profits by the end of next year. That is down from about half its profit last year.
GE's moves to pull back from volatile parts of the financial sector include the recent sale of its Japanese consumer lending unit and a plan to trim its $90 billion commercial real estate portfolio by $10 billion next year.
But the financial meltdown has many banks and investors looking to preserve their capital rather than make acquisitions, and could make some of the deal-making difficult. Last week the company said it probably would not be able to sell its $30 billion U.S. private-label credit portfolio, which it had been shopping around since December.
(Editing by Maureen Bavdek)
