Kodak EK share price

[Alan Johnson]

Bit of a dive today:
http://finance.yahoo.com/q?s=EK&ql=0

 

[Jeff Kubach]

It doesn't sound good.

Jeff

 

[CGW]

Anybody holding EK stock yesterday?

 

[MaximusM3]

Anybody holding EK stock yesterday?

No, but I did buy another 100 rolls of Tri-X today though.

 

[CGW]

No, but I did buy another 100 rolls of Tri-X today though.

Nothing like too little too late!

 

[MaximusM3]

Nothing like too little too late!

I did my very best over the years..bought a ton, shot a ton, and still doing it....my conscience is at peace

 

[CGW]

I did my very best over the years..bought a ton, shot a ton, and still doing it....my conscience is at peace

Nobody's really culpable here. I recently bought Kodak film and chemistry for a stab at development. We were all trampled, though, by that herd of independent minds that stampeded away from film.

 

[Mustafa Umut Sarac]

I shoot maximum 3 rolls of Kodak per month. Thats my budget. My minilab switched to sell
Kodak Pro Photo negative color film and worst colors , blue casted pictures I have ever had. I am the only film customer of the minilab and he says only I and one other guy comes for development and scan. Film , development and 36 frames scans costs me 9 dollars or less. Film quality and development quality really kills my attitude. I have an point shoot Leica , excellent camera but this blue cast on highlights needed heavy photoshoping and kills the film quality. I started to hate my pictures.

Back to topic , 4 days ago someone posted 19000 workers Kodaks value is half of the 50 workers Tumbler .
Now 1/4 in 4 days , its so speedy and like watching an aircraft accident.

I will buy Ilford and develop and scan at home. For me , Ilford Pan F is better than Tri X.

Umut

 

[MaximusM3]

Nobody's really culpable here. I recently bought Kodak film and chemistry for a stab at development. We were all trampled, though, by that herd of independent minds that stampeded away from film.

Yep...and one day they will figure out that they have lost most of their images on old computers, obsolete or crashed hard drives, unusable cell phones, and they cannot even sit down around a fireplace to enjoy some decent prints/memories of their lives or a lifetime's work. Everyone should also give a huge round of applause to Steve Jobs for bringing us the iPhone and all the app developers that have given everyone the tools to become incredibly talented artists, pouring humongous amounts of useless crap that no one cares about, images that are forgotten 3 seconds later, into sharing sites and social networks. This is now the "State of the Art".

But I digress here..

 

[MaximusM3]

I will buy Ilford and develop and scan at home. For me , Ilford Pan F is better than Tri X.

Umut

Mustafa,

That's not quite fair. They are two COMPLETELY different animals. One is not better than the other, just completely different for different tastes, shooting styles, speed requirements and situations. Trust me, Tri-X would be missed A LOT more than PanF if both were to kick the bucket.

Max

 

[wy2l]

Good news! Your stock dropped 54% in one day!

It's like the phone call I got from my stock broker some years ago...

"Great news! Your stock lost half it's value in one day! What a great opportunity to buy!"

Kris

 

[Mustafa Umut Sarac]

Max ,

I agree with you but I believe Tri X requires a real Leica that ones were 30 to 70 years old . My new camera is modern , more sterile , hot colors , no artful grain. I think until I buy an real Leitz , Kodak will lost the game. So today , Pan F is more suitable to my camera. I always looked and apprentice the old photographs but I am older and my taste is newer. Ilya1963s pictures were really excellent and I loved them a lot , especially dark , cinema affiches ones. Whites are dazzling and lots of tones of blacks , greys and highlights. They made me to believe Ilford easily.

Umut

 

[Ken Nadvornick]

...its so speedy and like watching an aircraft accident.

..

 

[Ken Nadvornick]

I also did my best with Kodak films. I've bought and shot <add your favorite Kodak film here>* as much as I could.

* Underlined phrase in brackets added by Ken. -KN

As I've said many times before, APUG - hosting possibly the largest concentration of hard-core film users remaining - is NOT the place for anyone to start laying blame. When, and if, the Kodak ship takes its final plunge to the bottom, it only stands to reason that it will not be primarily the fault of those here.

Ken

 

[Mustafa Umut Sarac]

Agree with Ken.

 

[arpinum]

I had shorted the stock at 2.8. sold on tues.
Seemed very obvious Kodak's CEO was bluffing about the interest in a kodak patent sale.
Thought the bankruptcy talk wouldn't happen until after the current quarter ended, but you can't predict them all. More info here: http://online.wsj.com/article/SB10001424052970204138204576603053167627950.html

Kodak pensioners, watch out!

 

[MaximusM3]

Max ,

I agree with you but I believe Tri X requires a real Leica that ones were 30 to 70 years old . My new camera is modern , more sterile , hot colors , no artful grain. I think until I buy an real Leitz , Kodak will lost the game. So today , Pan F is more suitable to my camera. I always looked and apprentice the old photographs but I am older and my taste is newer. Ilya1963s pictures were really excellent and I loved them a lot , especially dark , cinema affiches ones. Whites are dazzling and lots of tones of blacks , greys and highlights. They made me to believe Ilford easily.

Umut

Mustafa,

Grain is not about the camera, and only VERY partially about lenses. Tri-X will give you a great look and grain with any camera and some Rodinal, assuming you put some effort into it. Ilya's work is fantastic but there is a A LOT more that goes into that than simply a film choice and lens. In fact, I can honestly say that his images look the way they do NOT because of his film choice. Developer plays a part but it's his process and vision that deliver those prints. He contact prints 8x10 sheet film on Lodima paper and develops them in Amidol. That gives a very unique look and it is not easy to master successfully. I don't want to burst any bubbles but the truth is that film choice is the least important part of the look of a final print.

 

[hpulley]

Ultimately it is Kodak's fault for the failure of Kodak. Consumers cannot be held responsible for a company, the company is responsible for figuring out what people want to buy, setting the right price, marketing it correctly and so on. After effectively inventing digital photography, they let others take it away. Playing catch-up now was always going to be a failure. After failing in the consumer market they decided that business to business was the place to be but again they are very late to the party.

$3 billion in patent sales would be good. They've lost $1.78 billion since 2008 so at that rate the patents would give them some breathing room if they can figure out what people want to buy, set the right price, market it correctly...

 

[keithwms]

EK's patents are basically worthless without the cash on hand to defend them. They will try and sell them, and that may help raise some funds, but what they really need to do is fragment and save what can be saved. But I can tell you that selling patents is hard work, the buyer has to think they're getting something defendable and they must also have the funds to defend them. A better approach may be to carve out mini-EKs base don well established IP.

We can all offer theories why EK got into this situation; obviously, obsoleting one's own product is what comes to mind. But then if you look at IBM, Microsoft, Apple etc. they all have a long and proud tradition of obsoleting their own inventions... if done properly, it works very well. There is more to it than that.

The mismanagement of the brainpower at EK is a tragedy of modern American business. I feel bad for the current employees and all the many decades of brilliant people who contributed so many wonderful ideas and discoveries. Alas, I see a lot of this in Big Science in the US. It's very sad for someone like me who's just old enough to remember America at its peak and who thought I had a place in that.

 

[semi-ambivalent]

obsoleting their own inventions... if done properly, it works very well.

This was done by Hewlett Packard, who stayed in the inkjet business even after the advent of laser printers. Instead of abandoning the "obsolete" technology they made a great deal of money in both markets.

s-a

 

[CGW]

I'm not seeing vulture capitalists like Carl Icahn in the picture. He's likely poised to squeeze value out of RIM but Kodak? Where's the value?

 

[arpinum]

I'd like to gently sprinkle some cold water on hpulley's optimism:

The $3B figure for patents is too high. One research firm published this guess, but subsequent patent sales by others have shown the patent buying frenzy to be short lived. Kodak has been monetizing these patents for some time, and most major companies already have licenses. Those who won't pay have been doing well in the courts to squash the patents. Expect no more than $2B, and could be under $1B

Kodak only has 6-10 months before serious cash flow issues appear. The debt is junk status and sells for 25-45 cents on the dollar. Their pension liabilities are much greater than they admit due to their overly optimistic predictions on rate of return (~8.7%). A more realistic assumption would have their losses increase by at least 10% a year and adds $2B to total liabilities.

Kodak expects their turnaround to take another three years. To avoid a cash crunch they will be forced to sell not only their patents, but other valuable assets as well. They have already sold off many divisions, including the space and OLED divisions to name a few.

The patent sale won't net them as much cash as you think. Due to Kodak's debt obligations and terms (~$1.2B), assets sales such as this cannot be used to fund ongoing operations and must first go toward repaying debt. The cash from patent sales won't tide them over through the restructuring plan, and will buy them only a maximum of 2 years cash.

Can the company be restructured in bankruptcy?: Bankruptcy would slow the cash outflow enough for kodak to finish the restructuring, assuming the boat can be turned around.

Is liquidation still a possibility: ?

 

[aldevo]

I'm not seeing vulture capitalists like Carl Icahn in the picture. He's likely poised to squeeze value out of RIM but Kodak? Where's the value?

Actually, Icahn bought 7% of EK stock in November, 2003. I don't know if he has retained that stake or not. I think around 2005/2006 he had the option of increasing his stake but he opted not to...

I really don't know if Kodak has any hope of restructuring with a plan that allows its film division to continue operations. Most of the "value" of the company seems to be in its display technology patents - but a good 'ol fashioned Chapter 7 "smash and grab" auction could determine who receives those.

It's unfortunate, but as far as Kodak's debt holders are concerned the company may be worth more dead than alive.

 

[keithwms]

Is liquidation still a possibility: ?

Always is. But the question is whether it makes any sense to keep EK's structure. I would say no, hell no. They need to fragment into smaller, viable units. I can imagine, within EK's [too] broad range of expertise, a subset of smaller companies, perhaps private for a year or two, which could pounce on the inevitable economic upswing and make big waves. Look, it is a probably a good thing to make an nonviable company go away right now, ASAP, in these market conditions. You kill the legacy costs and sit and wait for the upswing and pin your hopes to that. What you don't do is hemorrhage money and credibility waiting for an upswing that could be many years away.

One has to remember that the most valuable quantity that a company has is not its patent library nor its brand. All of those things have fiat values, especially if the company is public. It is the quality of its people right now... and to a much lesser extent the company history. The patents come form people and those people still have the same brain cells. They may be tired of fighting and jaded and all that, but... one hopes that some of the core creative abilities are still there in the bowels of the company. If not then liquidate all and forget it, like polaroid.

If I were on the EK board I would march a bunch of venture capitalists into the room, get them to sign NDAs, show them the patents, and award the name EK to the best idea to keep some fragment of the company alive. The harsh reality is that the company as a whole is probably not viable.

I am assuming there is some really nice IP in there somewhere which can generate the next big thing. I could be wrong, it could be one big mirage. The venture capital will tell us which is true, and very soon.

 

[aldevo]

I'd like to gently sprinkle some cold water on hpulley's optimism:

The $3B figure for patents is too high. One research firm published this guess, but subsequent patent sales by others have shown the patent buying frenzy to be short lived. Kodak has been monetizing these patents for some time, and most major companies already have licenses. Those who won't pay have been doing well in the courts to squash the patents. Expect no more than $2B, and could be under $1B

Kodak only has 6-10 months before serious cash flow issues appear. The debt is junk status and sells for 25-45 cents on the dollar. Their pension liabilities are much greater than they admit due to their overly optimistic predictions on rate of return (~8.7%). A more realistic assumption would have their losses increase by at least 10% a year and adds $2B to total liabilities.

Kodak expects their turnaround to take another three years. To avoid a cash crunch they will be forced to sell not only their patents, but other valuable assets as well. They have already sold off many divisions, including the space and OLED divisions to name a few.

The patent sale won't net them as much cash as you think. Due to Kodak's debt obligations and terms (~$1.2B), assets sales such as this cannot be used to fund ongoing operations and must first go toward repaying debt. The cash from patent sales won't tide them over through the restructuring plan, and will buy them only a maximum of 2 years cash.

Can the company be restructured in bankruptcy?: Bankruptcy would slow the cash outflow enough for kodak to finish the restructuring, assuming the boat can be turned around.

Is liquidation still a possibility: ?

You're right about those patents. And the number of buyers for those patents is swiftly declining as the markets to which those patents are relevant begin to mature (just ask Nokia, RIM, Motorola, HP, etc...)

I think seeking Ch. 11 protection sooner rather than later is the right thing to do because we're again faced with the potential of a serious global banking crisis - which could make it much, much harder for them to get "debtor-in-possession" financing.

Given that all of their operations remain in cyclical or secular decline and the risk-aversion of lenders, yes, I think Ch. 7 liquidation is a definite possibility. In fact, Kodak's debtholders may prefer that the company go that route immediately because Kodak's assets are not likely to appreciate as time passes.

And even if they do obtain financing for continued operations, I think that that financing would only come about as a result of a restructuring plan that breaks up the company.

I'm not sure where all of the above leaves the film division but I suspect that if Kodak film continues to be manufactured, it will have to be made outside of the USA. The current USA-based production infrastructure is now too large and there is the ongoing matter of toxic torts...