Tuesday, October 23, 2007

bullish signal or drop in the bucket?

It was declared that in the past few days the CEO of General Electric (GE), Jeff Immelt bought 83,000 shares of GE for around 3.3 million dollars. Usually when a CEO buys a significant amount of his company's shares it could be viewed as a bullish signal for the company going forward.

Looking at it another way, Jeff pulls in around 18 million dollars per year according to Reuters. That is a pretty good chunk of change for one year's work. So essentially Jeff's purchase, if made by someone making $50,000 per year, would be the equivalent of $9,150... Still a decent sum of money but this is hardly betting the farm on a business that one controls.

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