What happened

Shares of battered industrial conglomerate General Electric (NYSE:GE) tumbled 38.8% in the first six months of 2020, according to data provided by S&P Global Market Intelligence. The move extends a four-year losing streak for GE, with shares down nearly 80% from their July 2016 post-Great Recession highs. 

So what

Since 2008, things have been going badly at GE. Poorly timed investments in consumer credit and oilfield services conspired with the disastrous acquisition of Alstom Power to tank the company's finances.

A man watches a large red arrow crash downward through the pavement in front of him.

Image source: Getty Images.

Over the last several years, GE has been trying to right the ship by spinning off those troubled businesses and selling other low-margin units, like appliances, light bulbs, and locomotives. In March, CEO Larry Culp also managed to score a win by closing the sale of the company's biopharma unit to his former company Danaher in a $21.4 billion deal.

The current problem for GE isn't what's gone, it's what's left. The market for most of GE's power businesses -- many of which were acquired in that terrible Alstom acquisition -- has collapsed. Without its high-margin biopharma unit, GE's healthcare business is likely to see lower profit margins. The company's wind turbine business is holding its own, but is only just beginning to break into the lucrative offshore market; growth will likely take years to materialize. 

That left the powerhouse GE Aviation unit, which makes aircraft engines, as the standout performer in the company's portfolio. But the high-margin business has been clobbered with the one-two punch of the Boeing (NYSE:BA) 737 MAX and coronavirus-related travel restrictions. 

GE Aviation was the sole engine provider for the 737 Max, which was one of the best-selling passenger planes in the world. After two fatal crashes linked to design flaws (unrelated to GE's engines), the entire worldwide fleet of 737 Max jets was grounded, and Boeing stopped delivery of the planes. Then, with air travel in many parts of the world canceled due to the COVID-19 pandemic, orders for new planes dried up, many airlines canceled existing orders or pushed back deliveries, and plane manufacturing by Boeing and rival Airbus was suspended.

Small wonder that investors ditched GE.

Now what

Although airplane manufacturing has resumed, and some new orders have begun trickling in, investors still have justifiable concerns about how GE Aviation -- and, by extension, the rest of the company -- will be impacted.

Early in his tenure as CEO, Culp had been referring to 2019 as a "reset year" for GE, and targeting 2020 for a return to growth. More recently, he adjusted his position, indicating 2021 was the year investors could expect to see growth begin in earnest. After the coronavirus pandemic began, though, GE yanked its 2020 guidance, so it's anyone's guess whether that timeline is still intact. 

GE's 2020 underperformance has knocked its shares down to 20-year lows, but there's good reason for that. With so much uncertainty in the company's key markets -- and its storied dividend slashed almost into oblivion -- there's not much to recommend GE to investors right now.