Has General Electric Hit Bottom? Cramer Says No

General Electric Company GE's rough track record over the past few years turned worse this week when the Dow Jones Industrial Average booted the company's stock. With the stock trading at multiyear lows, the worst has to be over, right?

Wrong, according to CNBC's Jim Cramer.

What Happened

Investors who think GE's removal from the coveted index is a positive need to ask themselves a simple question: "on the basis of what?" Cramer said during his daily "Mad Money" show Wednesday evening. Being removed from the index doesn't erase the fact that the company lowered its outlook last October, slashed its dividend in half one month later and announced a notable charge in its long-term care division early this year.

GE allocated $6.2 billion toward its insurance portfolio this year with another $15 billion planned over the coming seven years, Cramer said. Given the large numbers, investors may not even need to figure out how the multiples of other segments are performing.

"It's like asking about the layout of the deck chairs on the Titanic," Cramer said. "Who cares when you just crashed into a huge iceberg?"

Why It's Important

Even though GE's stock is trading at levels not seen since the 2008 financial crisis, it is still "difficult to believe" it has found a bottom, Cramer said. GE may be forced to cut its dividend payout once again, as the long-term care business poses too much risk, he said.

What's Next

GE will be removed from the Dow Jones index on June 26 and replaced with Walgreens Boots Alliance Inc WBA.

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