Eastman Kodak Co Com (NASDAQOTH:EKDKQ)

CAPS Rating: 1 out of 5

Engaged in developing, manufacturing, and marketing digital and traditional imaging products, services and solutions to consumers, businesses, the graphic communications market, the entertainment industry, professionals and healthcare providers.


Player Avatar TrojanFan (25.67) Submitted: 6/24/2011 9:12:57 PM : Underperform Start Price: $3.38 EKDKQ Score: +54.15

Lots not to like about this business.They are obviously in a dying business with the proliferation of digital cameras and smartphones displacing the need for film.Their margins are razor thin and they have negative operating cash flow and EBITDA. They have lots of cash, but at the rate they are burning is they'll be lucky if it lasts to the end of the year.They have been lucky enough to tap the debt markets to plug their operating deficits, but I'm not sure how long they will be able to do that.They are facing a pretty significant maturity wall in 2013 and if they don't meet it, their ammended and restated credit facility (due in 2016) will get probably get accelerated on them. There are numerous restricting covenants that got put in place as a result of their last amendment and extension.Reorganization is the likely path for this company if not an outright liquidation. I'm not sure that the equity will fair very well in that scenario because of all the debt that will likely be in front of them when the company probably files for Chapter 11 a few years hence.

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