Shares of Eastman Kodak Company, which fell more than 50% last Friday on bankruptcy fears, spiked more than 10% in today’s early trade, continuing steady gains throughout the week so far.
On Friday, Kodak shares plunged below $1 after the Wall Street Journal reported that the company hired the services of Jones Day for restructuring advice. The company, however, denied that it is planning to file for bankruptcy, pushing the stock sharply higher in Monday’s trading session. The stock once again fell sharply on Tuesday but is paring some of the losses in early trading today.
Speculation that the Kodak will file for bankruptcy rose late last month after the company said in a SEC filing that it drew $160 million against the credit line, indicating that the company does not have the financial capability to implement a planned strategic transformation. Kodak is looking to sell its digital imaging patents, which could fetch as much as $3 billion. However, the company seems to have not made much progress on this front.
Meanwhile, the hiring of Jones Day further fueled bankruptcy speculation. However, the company said that it is committed to meeting all of its obligations and that it is not unusual for a company in transformation to explore all options and to engage a variety of outsider advisers.
Additional articles published by Beacon Equity Research can be found on their website at www.BeaconEquity.com
Let us hear your thoughts below: