A New Era Begins for Kodak
It's a new Eastman Kodak that will emerge from bankruptcy on September 3.
The company, whose reorganization plan was approved in federal bankruptcy court on Tuesday will no longer sell consumer products. Instead, Kodak will focus on commercial and packaging printing.
Analyst George Conboy of Brighton Securities says the initial shareholders of Kodak's new stock are the firms that have put up financing for the new venture. "It's expected that after these companies and creditors get some stock, they'll sell it, because not everyone who will get stock in the new Kodak will want to be a shareholder. They'll want cash. So, we expect the new stock to trade shortly after Labor Day."
Conboy says he does not expect the new Kodak to focus on year-to-year growth as much as keeping costs down. He says he'll need to see three things from the "new" Kodak before he'll recommend it to investors. "One thing would be profitability. Another thing would be a reasonable expectation of growth. A third thing might be a cash dividend for shareholders. But usually a new company, and I think you can call Kodak a new company from the shareholders' perspective--you won't see a new dividend from them."
Conboy says it's critical for Kodak's new Board of Directors choose a CEO sooner rather than later.