Is General Electric's Reverse Stock Split A Smart Move? Josh Brown Thinks So

Although the General Electric Co GE reverse stock split won't affect the fundamentals of the company, it's a smart move, Ritholtz Wealth Management CEO Josh Brown said Tuesday on CNBC's "Fast Money Halftime Report."

What Happened: On June 18, General Electric announced it will proceed with the one-for-eight reverse stock split that was previously approved by shareholders. The stock is set to begin trading on a split-adjusted basis on Aug. 2. 

General Electric "looks like a loser stock for loser investors and it has been," Brown said. General Electric is one of the worst large-cap stocks investors could have bought over the last 10 to 15 years, as it has underperformed, he noted.

Related Link: Is It Time To Buy GE's Stock?

Why It's Important: The company aims to change that narrative with the reverse split. It makes sense for General Electric "to wipe the slate clean," he said, adding there are new people running the company and it isn't the same company it was 10 years ago.

The reverse stock split might potentially be the catalyst that allows the stock to convincingly break out and trend higher, Brown said.

Goldman Sachs named General Electric a top large-cap idea on Tuesday.

Price Action: General Electric has traded as high as $14.41 and as low as $5.93 over a 52-week period.

At last check Tuesday, the stock was up 1.76% at $13.11.

Photo: courtesy of General Electric.