A little over two years ago, on September 29, 2009, Kolhberg, Kravis Roberts purchased $300 million in Senior Secured Notes from Eastman Kodak(EK) and was granted 40 million warrants at $5.50 per share. As part of the investment, KKR
exercised its right to nominate two directors, Herald Chen and Adam Clammer. Today, Kodak announced that Mr. Chen and Mr. Clammer had resigned. In keeping with its exemplary corporate governance, the company released no information as to the cause of their departure. It would be safe to say, however, that KKR now feels that its interests have diverged from those of Kodak shareholders. Perhaps it is a sign that a bankruptcy filing is imminent.
When we wrote about Kodak’s death rattles last week and wondered why the stock had popped(a gain which has now evaporated), we received some anonymous comments saying that we were foolish and knew nothing. This may well be so, but we’d like to think we’re educable. So if we’re missing something, if Kodak is really the next great stock, if it’s time for the return of the Nifty Fifty, make your case. We’re happy to give equal time. We’ll even throw it up as a post if it’s well written and courteous. But in the meantime, we have to reiterate- this dead cat ain’t gonna bounce.
Disclosure: Author has no position in any stock mentioned