Eastman Kodak Shares Plunged: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Eastman Kodak (NYSE: EK  ) dropped 11% in intraday trading today after a negative article in The Wall Street Journal overshadowed positive news about its digital photography patent lawsuit.

So what: The Journal opened its article with this ominous statement: "The value of Eastman Kodak Co.'s bonds is sinking rapidly, a sign of growing concern the faded one-time blue chip is running out of time to adapt to the changes sweeping its industry." Also late yesterday, the U.S. International Trade Commission upheld a May ITC decision and again ruled in favor of Kodak in its lawsuit against Apple (Nasdaq: AAPL  ) and Research In Motion (Nasdaq: RIMM  ) .

Now what: Kodak is hoping that winning the lawsuit will result in $1 billion in royalties from Apple and Research In Motion. Even though the lawsuit was going Kodak's way, its bonds have dropped from about $0.86 on the dollar to about $0.73 on the dollar in less than a month. As The Motley Fool has noted in the past, credit analysts are typically quicker to spot problems than equity analysts. Kodak's stockholders should consider themselves warned.

Interested in more info on Eastman Kodak? Add it to your watchlist by clicking here.

Fool contributor Cindy Johnson does not own shares of any company named above. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


Read/Post Comments (3) | Recommend This Article (3)

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  • Report this Comment On July 19, 2011, at 3:30 PM, Henry3Dogg wrote:

    You say

    "...Also late yesterday, the U.S. International Trade Commission upheld a May ITC decision and again ruled in favor of Kodak in its lawsuit against Apple (Nasdaq: AAPL ) and Research In Motion (Nasdaq: RIMM ) ... Now what: Kodak is hoping that winning the lawsuit will result in $1 billion in royalties from Apple and Research In Motion."

    I think you've got your lawsuits mixed up.

    I believe that the decision in Kodak's favour yesterday was with regard to Apple suing Kodak, and not the same as the suit where Kodak is suing Apple and RIM and hoping that the ITC will change its previous ruling that Kodak has no case, and that it might get some money.

  • Report this Comment On July 19, 2011, at 4:06 PM, melegross wrote:

    Kodak's winnings in their suit will be small, as all but a few small areas were denied them. They won't getting the big payday they were hoping for.

  • Report this Comment On July 19, 2011, at 10:25 PM, NobodysFool111 wrote:

    As someone who bought EK when it was a so-called "dog of the Dow", I've watched as it's share price has dropped from $65.00 to it's current price.

    I've voted against re-affirming the CEO for a number of years as he seems to be unable to turn things around at Kodak. Beware the "Dogs of the Dow", they're a dog for a reason.

    The most unfortunate thing about Kodak is that it manufactures one of the finest CCD chips on the market. It is the preferred chip used in the majority of cameras produced for use in both professional and amatuer astronomy yet can't produce cameras wanted by the general public.

    This is a company that now seems to have value simply for the patents it owns. I refuse to sell my shares as it is a reminder of the most foolish investment I ever made and thus still has some value to me.

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