Eastman Kodak Co. (EKDKQ) is still trading as an equity despite its bankruptcy process. There remains a debate over whether or not the equity value will remain above the red-line or not, and perhaps it is the value of the patents that will make this ultimate decision.
Dow Jones recently ran the notion in its bankruptcy services that certain common stockholders believe that the patents could be worth more than the $3.4 billion to $4.0 billion that the company has projected. We think that this is an interesting view because most public company bankruptcies like this generally wipe out the common holders.
Shutterfly, Inc. (NASDAQ: SFLY) was recently reported on winning a stalking horse bid for Kodak’s digital portfolio and shares have risen handily since that news came out. It turns out that a few million spent will generate millions of new accounts and shares are now up almost 20% since then.
Creating a shareholder committee would not assure that there is value left. It may help, but this bankruptcy process is still far from over. At $0.29, Kodak’s OTC stock is only a penny above its 52-week low per Yahoo! Finance data. That is not representative of a lot of value, but it is at least not just a few cents as many other bankruptcy stocks go down to.
We are still considering this one a work in process.
JON C. OGG