Please ensure Javascript is enabled for purposes of website accessibility

Why Eastman Kodak Stock Plunged Today

By Evan Niu, CFA - Updated Mar 17, 2021 at 9:43PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Eastman Kodak reports 2020 results and files shelf registrations to sell securities.

What happened

Shares of Eastman Kodak (KODK -1.81%) plunged by as much as 11% today after the company reported full-year 2020 earnings results. Eastman Kodak also filed a mixed shelf registration that will allow it to sell securities, while also filing a separate shelf registration that will allow existing shareholders to unload up to 44.5 million shares over time.

So what

Revenue in 2020 declined to $1 billion, which resulted in a net loss of $541 million for the year. The industrials company finished the year with $196 million in cash but recently announced that it had secured access to additional capital to bolster its liquidity position. Eastman Kodak will get $310 million in incremental cash from a series of transactions that involve term loans, convertible preferred stock, and convertible notes.

Red stock chart going down

Image source: Getty Images.

"We mitigated the impact of COVID with cost-saving initiatives, launched several innovative print-business products and generated cash in the third and fourth quarters," CEO Jim Continenza said in a statement. "More recently, we announced a series of financial transactions which significantly strengthened our balance sheet and set the stage for growth through investments in our core businesses in print and advanced materials and chemicals, and new initiatives."

Now what

Eastman Kodak filed two securities registrations. The first includes a variety of different securities that the company can sell to raise up to $500 million in capital. Proceeds from any securities sales will be used for general corporate purposes, according to the prospectus. The second registration relates to 44.5 million shares held by existing shareholders, compared to the 78.5 million shares outstanding as of the beginning of March. Eastman Kodak will not receive any proceeds from those sales.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Eastman Kodak Stock Quote
Eastman Kodak
KODK
$4.34 (-1.81%) $0.08

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.