Eastman Kodak is back…
Eastman Kodak Co (NYSE:KODK) was back in the news today as the company announced it successfully avoided bankruptcy. The company, once a portfolio bellwether, has gained approval to come out of bankruptcy in July. The bankruptcy judge, Allan Gropper, and who oversaw the case agreed to the plans set forth by Eastman despite shareholder wishes. Shareholders whom approved the bankruptcy are still left in a tough spot. The companies creditors are only expected to get back roughly 5% of the money they are owed. Then after everyone else gets a little bit, shareholders sit lowest on the totem pole.
Management has worked hard to reshape the brand since the bankruptcy filing last year. Kodak’s Andrew Dietderich told the courts:
“Kodak is a different company that the one in the popular imagination and very different from the one that filed for bankruptcy.”
Kodak has sold the majority of its assets, businesses, and patents in an attempt to raise the necessary cash for approval. Going forward, the company will look to focus its attention on printing to avoid the complications and poor comparable seen within the film market. Since the days of strength, Kodak has lost its revenues to the emergence of digital photography. Rising expenses, dwindling relevance, and poor exposure caused the company to miss the growth seen within the digital market. Shares of the company currently trade with some liquidity over the counter.
Year to date shares are down more than 68% with much of the moving coming recently. Over the last five trading days shares are down more than 50% to $0.056. Last year the company generated $4.1 billion in revenues, however, it is too soon to day if the newly created Kodak has what it takes to survive in the competitive printing space. There are a number of large competitors watching these moves this morning, it will be interesting to see if analysts believe competition from Kodak is relevant
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