The decline and fall of Kodak

Shares plunge

The decline and fall of Kodak

1 October 2011 0:24 GMT / By Stuart Miles

Kodak, founded in 1896, is finding itself on the verge of bankruptcy after stock plummeted to its lowest levels since 1935.

The latest stock price, which closed at 78 cents only to rise to $1.02 in after hour trading, values the company at just over $200 million, a far cry from the $28 billion the company was worth in 1997.

Kodak, who invented the digital camera in 1975, has seen an epic decline and fall in its business over the last 4 years as it has struggled to fight off competition from other camera makers and phone manufacturers.

A giant in the camera industry at the turn of the century, Kodak has slowly seen its lead slip away as more and more aggressive competition has entered the market.

Combined with dwindling film sales, the inability to keep up with camera companies like Canon and Nikon, and being squeezed by camera phones on the pocket camcorder front, Kodak has failed to innovate, meaning it has not only failed  to stay ahead of the pack, but even keep up.

Even its latest venture, its all-in-one printers that promise to save you money on the standard running costs, has failed to ignite the public's interest.

That lack of "want" factor has meant that over the last 4 years, and even as far back as 1997, Kodak's stock as continued to dive as it has failed to make a profit since 2004.

However, it hasn't been until this week that Kodak has really started to see itself in trouble.

On Monday Kodak shares lost more than a quarter of their value after the company announced it was restructuring.

That stock crash led to rumours that the company was looking to file for bankruptcy, something Kodak, or to give it its full name, Eastman Kodak Company, denies.

In response to rumours circulating in the capital markets Kodak has said:

"Kodak is committed to meeting all of its obligations and has no intention of filing for bankruptcy. The company also continues to actively pursue its previously announced strategy to monetise its digital imaging patent portfolio. Kodak remains focused on meeting its commitments to customers and suppliers, and on delivering on its strategy to become a profitable, sustainable digital company."

Before adding:

"It is not unusual for a company in transformation to explore all options and to engage a variety of outside advisers, including financial and legal advisers. Jones Day is one of a number of advisers that Kodak is working with in that regard."

Those patents, which date back decades, are said to be worth around $3bn, however that is if Kodak can find a suitable buyer. The company is currently in legal battles with BlackBerry maker RIM and Apple (both started in 2010) although has won cases in the past against Sony. The fact that those two cases are still ongoing could put companies off a purchase. 

Even if the company did manage to sell its patent library, things still aren’t looking good for the company as its product portfolio isn’t very strong compared to the competition.

Could this be the beginning of the end for the company that asked us to “Share the moment”? It sadly looks like Kodak’s moment could have passed. 

Full tags
Cameras, Kodak, Biz, Results

share print story pdf email story

Recommended articles

Loading

Best iPad 2 apps

We detail the best iPad 2 and iPad apps in the app store Which iPad app should you download?

Windows 8

All the features and details of the new Microsoft operating system explained What's new in Windows 8?

iPad 3 rumours

What comes next? We look at the possible features, leaks, images, specs and more

Pocket-lint poll

Q. Will you be buying a PS Vita?

Vote YES Vote NO

» LAST TIME
When asked Will Samsung be making a mistake if the Galaxy S III isn't shown at Mobile World Congress in February? 51% said yes and 49% said no

Hot camera brands

All the latest camera news