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Stanley Druckenmiller Sees Big Buy Signal as GE Stock Craters

Stanley Druckenmiller Sees Big Buy Signal as GE Stock Craters

With General Electric stock falling more than 11% Thursday after the release of a damning report that said the company has been duping investors and committing Enron-like fraud, hedge fund manager Stanley Druckenmiller saw the stock’s collapse as a signal to buy.

Harry Markopolos, who is known for being the whistleblower who brought down Bernie Madoff’s ponzi scheme empire, accused GE of accounting fraud to the tune of about $38 billion.

“My team has spent the past 7 months analyzing GE’s accounting and we believe the $38 Billion in fraud we’ve come across is merely the tip of the iceberg,” Markopolos wrote in a 175-page report detailing his findings.

On CNBC’s “Squawk Box,” Markopolos said “it’s going to make this company probably file for bankruptcy. WorldCom and Enron lasted about four months. We’ll see how GE does.”

To read the report in full, go to www.GEfraud.com.

For it’s part, GE has denied the claims and said Markopolos is engaging in “market manipulation.”

“GE will always take any allegation of financial misconduct seriously. But this is market manipulation – pure and simple,” GE CEO Lawrence Culp said in statement. “Mr. Markopolos’s report contains false statements of fact and these claims could have been corrected if he had checked them with GE before publishing the report.

“The fact that he wrote a 170-page paper but never talked to company officials goes to show that he is not interested in accurate financial analysis, but solely in generating downward volatility in GE stock so that he and his undisclosed hedge fund partner can personally profit.”

The news caused GE stock to sink 11.41% Thursday — the share’s worst decline in 11 years — but Druckenmiller, who already held about 6.2 million shares of GE, said he believes Culp and made a bullish move on the stock.

“I believe Culp. … I bought (GE) stock today,” Druckenmiller told CNBC’s Kelly Evans.

Red flags also were raised concerning Markopolos’ intent because he was paid to do the investigation by an as-yet unnamed hedge fund. Markopolos said he gave the report to the hedge fund, along with regulators, before releasing it to the public. The hedge fund reportedly has made bets against GE’s stock.

More to come as this intriguing story develops.