General Electric has been scarred by troubles in its power business and regulatory scrutiny of its accounting practices. Its market value is far off its peak of $594 billion in 2000. (Arnd Wiegmann/Reuters)

General Electric’s stock rebounded Friday as investors and analysts pushed back against a bombshell report that leveled fraud accusations at the conglomerate and suggested it was spiraling toward bankruptcy.

GE shares had plunged more than 11 percent Thursday after Harry Markopolos, the whistleblower who sounded the alarm on Bernie Madoff, released a report alleging GE was using accounting tricks to mask the depth of its financial problems.

Chief executive Lawrence Culp snapped up $2 million in company stock Thursday when the price dropped to $7.93, deepening his financial ties to the company in an apparent effort to reassure investors. Noted hedge fund manager Stanley Druckenmiller, who said he did not own GE shares before Culp took over, confirmed that he had also boosted his investment in General Electric in the midst of the stock’s plunge on Thursday.

“Simply put, I have faith in Mr. Culp,” Druckenmiller said in an email to The Washington Post. “His track record is exemplary. He got a thorough look at the company as a board member before he took the job, which he did not need. He was buying the stock personally just days before the inflammatory public attack alleging fraud. We have met Mr. Culp and analyzed the business and feel the risk/reward is attractive.”

In a 175-page document posted online Thursday, Markopolos laid out what he claims are $38 billion worth of accounting irregularities. After reviewing more than a decade’s worth of financial statements, his researchers concluded that GE is understating its insurance liabilities and that it does not have enough cash.

A number of analysts who closely watch GE agree that the company will likely face larger losses as it pays out claims for long-term care policies, which are used to pay for assisted living and nursing homes. But they also said the size of its potential losses is up for debate and that it’s not clear whether its troubles are severe enough to push the company into bankruptcy.

“We have been cautious on GE’s pending future liabilities, but with up to $30 billion in cash coming in, we believe they are going to have the funding to navigate the potential future expenses,” said Jeff Windau, an analyst with Edward Jones.

Analysts also point out that GE is already under scrutiny for its accounting practices, as it faces investigations from the Securities and Exchange Commission and the Justice Department over a charge to its insurance business and a write-down in its power division.

The once-celebrated American company has been scarred by troubles in its power business, larger than expected write-downs, and regulatory review of its accounting practices. The conglomerate’s market value was $76.7 billion Friday, far from its peak of $594 billion in 2000. Last year, it was knocked from its perch as a member of the Dow Jones industrial average after more than a century on the list.

Markopolos is a former financial analyst who spent nearly a decade investigating Madoff’s business before his multibillion-dollar Ponzi scam was discovered in 2008. Analysts and investors caution that Markopolos stands to gain from a drop in GE’s share price.

Markopolos said on CNBC that he looked into the company at the request of a “mid-sized U.S.-based hedge fund” he did not identify. He told the financial news channel he will receive a “decent percentage” of any proceeds the hedge fund earns from shorting the company’s stock. Markopolos did not respond to an emailed request for comment.

Culp blasted the report as “market manipulation — pure and simple,” in a statement. The fact that Markopolos “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.”

GE’s slide Thursday prompted other bullish investors, like Druckenmiller, to jump in. Shares recouped most of their losses Friday, closing up 9.74 percent, to finish at $8.79.

“It’s a cheap stock. It’s a giveaway,” said Ken Langone, one of the co-founders of Home Depot and a former member of the GE board. Langone, who said he bought millions of shares in recent days, including in the midst of Thursday’s decline, said GE has solid businesses. He is betting that Culp will fix its troubled power business in the next couple of years.

Culp took over GE last year when the company’s board ousted CEO John Flannery after only a year on the job. Culp became the first outsider to lead GE in its 126-year history. The move was viewed by some analysts as a sign that GE wanted a fresh perspective to help turn around the struggling corporation.

Culp was previously the CEO of Danaher Corp., a Washington-based conglomerate that specializes in science and technology. Under his leadership, the company’s share price was multiplied by nearly five times.

Joshua Aguilar, an equity analyst for the fund research firm Morningstar, said he expects Culp to help GE reduce costs and make other improvements. He agrees that GE may be underestimating the costs it might face on its long term care policies, but he said he doesn’t expect the shortfall to be as large as Markopolos predicts. “I do believe that maybe they have to cough up more cash but no one really knows the definitive answer to that question,” Aguilar said.