Eastman Kodak(EK) was once synonymous with photography and imaging. Today, like the abandoned subwayin its home town of Rochester, it stands as a hulking relic testifying to the lost hopes and dreams of a bygone era. Kodak’s
moments are now but a series of shadowy images of past glory wafting away. This afternoon, the company issued two press releases. The first, announcing an agreement to sell Eastman Gelatine for an undisclosed amount, stated that it was
consistent with its previously announced intention to sell non-core assets to sharpen the Company’s focus on its digital growth initiatives and accelerate Kodak’s transformation to a digital company
It’s a good thing the visionaries at Kodak have recognized the future is digital and have decided to sharpen their digital focus and accelerate their transition to digital. If only it were 1995! The company sold a minor division with just 95 employees for an amount it chose not to disclose, nor did it disclose any details about the division’s revenue nor profitability. In short, this is an immaterial event that has little impact on Kodak’s fight to remain solvent.
The second announcement, which was quite brief, noted the election of Laura Quatela, currently General Counsel, as President. What about Philip Faraci, the current President? No problem, he’s also President. No doubt Kodak noted how effective it has been for Research In Motion(RIMM) to have co-CEOs and decided to emulate that company’s stunning success. CEO Antonio Perez noted that the move reflected the strategic importance of the company’s intellectual property. Kodak has 3 towering legacies: a brand synonymous with photography, a wealth of patents covering imaging technologies, and a crippling pension obligation. The company invented much of modern imaging yet was slow to transition to the new world and gave up leadership to others. The market holds out hope regarding the value of patents and today’s 20% jump after hours is clearly a reaction to Ms. Quatela’s appointment as President. Even in this act, the company has proved tentative, keeping Mr. Faraci in place. This lack of decisiveness and vision led to the company’s spiral downwards, and it may eliminate any chance the once-great company has of voiding bankruptcy.
Disclosure: The author holds no position in any stock mentioned
- Eastman Kodak names Laura Quatela as president (marketwatch.com)
- Kodak agrees to sell gelatin business (seattletimes.nwsource.com)