EK

[Donmck]

There was no news from the company to explain the move, raising suspicions that someone is preparing a takeover bid. And there’s certainly no shortage of suspects among the private equities crowd as they look for ways to spend their billions before the end of the year.


http://www.marketwatch.com/story/kodak-shorts-on-the-run-2010-12-09?siteid=yhoof

 

[Ken Nadvornick]

Watching this with interest...

Ken

 

[pentaxuser]

Well according to Jim Jelter, it is Kodak's efforts to join the digital revolution which has paid off. So will that result in even more efforts to convert and if that is the winning formula anyway then will the takeover merchants subscribe 100% to this "winning formula" and without carrying any baggage or sentiment for EK's past?

Either way it doesn't sound good for the future of EK's analogue products unless of course EK were to say that JJ has got things substantially wrong and the share price revival is down to analogue sales, at least in part.

pentaxuser

 

[aldevo]

Remember that anybody who buys Kodak inherits a potentially massive environmental tort liability. This would be difficult to estimate.

EK has been the subject of buyout rumors before.

 

[aldevo]

We could speculate on this one until the proverbial cows come home...

http://www.bloomberg.com/news/2010-...d-buyout-speculation-update1-.html?cmpid=yhoo

EK has been the subject of buyout rumors before. Many of these rumors have circulated around an HP acquisition of EK.

The management can talk about "digital transformation" all they want - but an exit strategy might be more lucrative to the investors.

But there's another possibility...

It was also announced that EK would be removed from the S&P 500 today. Now, when a company is growing an addition to an index like the S&P usually means more analyst coverage and investor interest. When a company is not growing - and leaves the S&P - the volatility of the stock usually increases. That could have prompted lots of short covers. Since the stock also broke above its 200 day moving average today (usually a sign of price support) - this effect could have been exacerbated.

All useless speculation...

 

[c6h6o3]

http://www.bloomberg.com/news/2010-...d-buyout-speculation-update1-.html?cmpid=yhoo


When a company is not growing - and leaves the S&P - the volatility of the stock usually increases. That could have prompted lots of short covers.

It could also be just an old fashioned short squeeze.

 

[Donmck]

All good possibilities---

Also, not forgetting that there is a "pension bomb" somewhere down the road---and they are in the hole about $.5 B or more to KKR @10+%.

 

[aldevo]

Kodak's pension obligration is actually closer to $2 billion (long-term).

Looking at this a second time, I think there's an elevated possibility of a private equity buyout being concluded (though possibly not announced) before end-of-year. The timing of many such deals is often late December for tax reasons.

There's been plenty of buyout rumors concerning EK before, but I think this time there might be some truth to it.