Equities of General Electric Co.
dropped 3.5 percent in morning trading on Monday to step down from a peak of 2½ months after JP Morgan's famed analyst Steven Toussa disputed the rally after the news that the terms of the merger between Wabtec Corp.
and GE Transportation were revised. Shares rose 4.3% on Friday in the news. Tusa said the deal value fell by about $ 4 billion or 50 cents per share. "The revised terms of the transaction [Wabtec] are both mechanically and mathematically negative to GE's shareholder through our analysis," Tusa wrote in a note to customers. "Everything we believe in is clear that GE needs money, taking less value, and a significant tax impact on shareholders in return for better eligibility." He reiterated his neutral rating and the share price of $ 6, which is 32% below current levels. Tusa stirred up last month when he upgraded GE to neutral after being underweight for years to mark the bottom of the stock. GE stocks fell 45% over the past 1
lost 14% and the S & P 500
declined 8.3%. Subscribe to MarketWatch's free emails. Sign up here.