A plan which cuts about $4.1 billion of debt for Eastman Kodak was approved by US bankruptcy judge Allan Gropper yesterday. The plan allows Kodak to reorganize itself into a company that will actually provide no consumer products but will instead focus on printing technology for corporate customers. This is good news for the company on the whole by saving it from extinction, but it does nothing to compensate shareholders. Only secured claims will be paid in full. Unsecured creditors will take a huge hit at 4-5 cents on the dollar but again, shareholders like you or I are completely out of luck.
The plan hinges on Kodak being able to sell $406million in stock. That's 85% of the company's equity which is being backstopped by a large group of creditors. This reorganization plan will shift focus to touchscreen sensor technologies and motion picture film production.
Now that you have a link to the original article, and since I'm not one of those impartial, objective writers allow me to share the piece of this that confuses me.
I'm no financial guru and it's possible that I'm not fully understanding a specific detail. If that's the case, please feel free to write in and educate me. I'm happy to learn.
Kodak died and in it's death every individual that invested in it's stock has nothing to show for it. We all understand that is the risk, no problem. However, now they are saying that if you invest again they are sure they can be successful again. Their goal is to refocus on touch-screen technology and to continue making film for the motion picture industry. That's right, the very same company that invented the digital camera and then couldn't do anything with it is going to succeed by holding fast to another medium with limited life. I don't see the brilliance here. Your company is struggling to survive...Why spend anything on a medium that is (as before) going to be totally obsolete soon?
However, if you believe they can pull themselves back from death this is your chance. Eastman Kodak stock is currently at $0.06