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Top executives at General Electric spent much of yesterday trying to convince investors that the company isn't on the verge of calamity. The iconic American corporation makes everything from refrigerators to jet engines to TV shows, but its stock price has plummeted and that's because investors are worried about big losses at GE's financial division. NPR's Chris Arnold reports.

CHRIS ARNOLD: To get a sense of just how much stuff GE makes, all you really have to do is look around you. And I am standing in my kitchen right now. It turns out a lot of the light bulbs in my house are made by GE, my alarm clock is made by GE, my dishwasher here, which is on its last legs, is made by GE.

GE also makes all sorts of stuff that you don't see - the equipment inside a nuclear power plant, airplane engines; it built the controls inside of the Panama Canal, and it's just been a part of the American landscape for more than a century.

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ARNOLD: For years, GE was considered the pinnacle of successful American management. During the '80s and '90s, it's then-CEO Jack Welch gained hero status among many in the business world. But right now some analysts think GE is in serious trouble. It recently cut its stock dividend to raise money after promising investors that it wouldn't do that. Its stock price took a massive dive earlier this month, down from around $40 a year ago to around six bucks.

Mr. DAVID KOTOK (Cumberland Advisors): Well, to see GE taken apart down to $6 a share was a remarkable event because it is such a global diverse company.

ARNOLD: That's David Kotok, chief investment officer of Cumberland Advisors. The stock has come up sharply off that low, but it's still down about 70 percent from a year ago. And that might seem kind of scary. What does that mean for the whole U.S. economy if investors are panicking about a company like GE? Richard Hofmann is an analyst with the research firm at CreditSights.

Mr. RICHARD HOFMNAN (CreditSights): Yeah, GE touches so many different facets of, you know, American industry, that it certainly, you know, takes heed and notice when you see a stock like GE going into a free-fall mode.

ARNOLD: But it turns out analysts like Hofmann are worried the GE's not actually so diverse these days. That's because over the years it's gotten heavily into financial services through its GE Capital unit.

Mr. MATTHEW KELLEY (Sterne Agee): What's happened is this subsidiary has become such a large piece of the overall institution.

ARNOLD: Matthew Kelley is a senior analyst at the stock research firm Sterne Agee. He says as much as one-half of GE's earnings have been coming from GE Capital in recent years, and most of the company's assets are in GE Capital.

Mr. KELLEY: It's almost 85 percent of the total balance sheet for GE.

ARNOLD: So you're saying 85 percent of everything that GE owns that has any real value is wrapped up in GE Capital, not all these other parts of GE that everybody is familiar with.

Mr. KELLEY: That is correct. It's an overwhelming amount of the asset base, the equity base.

ARNOLD: Kelley says GE Capital has been buying billions of dollars worth of office buildings and other real estate that's now falling in value. He says it also loaned out $27 billion for risky home loans in Europe. GE has become a major credit card issuer.

Mr. KELLEY: They are the provider of credit for, you know, the Wal-Mart credit card, for example. I think the problem here is a ton of asset growth into riskier asset classes that is now coming back to cause problems.

ARNOLD: In other words, he says, GE may have made a lot of risky bad investments that could cause the same kinds of big losses that so many major banks have been suffering. In fact, bearish analysts like Kelley are now looking at GE more like a troubled bank than the big industrial company that it's always been.

Mr. KELLEY: GE Capital is really facing the same headwinds that we hear about every day from British banks, from U.S. banks, from European banks, and we believe that they will experience losses.

ARNOLD: For its part, GE has been trying to downplay this scenario. The company spent five hours yesterday with Kelley and other analysts going over its financial situation. GE's CFO, Keith Sharon…

Mr. KEITH SHARON (GE): We expect GE Capital to be profitable in 2009, and when we come through this tough cycle, we're going to be even better positioned from a competitive perspective.

ARNOLD: Many analysts think the stock had fallen too far when it down at $6 a share. David Kotok…

Mr. KOTOK: That was absurd, unless GE was going to fall into a bankruptcy or a mode in which it was as wounded as a company like AIG. And GE is not AIG. And it's clear that the market has realized that.

ARNOLD: Still, some analysts think that GE, like many other businesses, got lured in by the profits in the global lending and real estate frenzy. Some say that easy money became part of the mortar supporting the larger company, and with that crumbling they say GE's got a lot of shoring up to do.

Chris Arnold, NPR News.

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