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Eastman Kodak recently emerged from its 19-month Chapter 11 proceedings, but the former photography icon is a mere shadow of its former self. The reorganized company will focus on the commercial printing business. Annual revenues are expected to be about $2.7 billion, down from $14 billion a few years ago.
Clearly, Kodak is still a highly recognizable brand, although most of its recognition came through photography which it is no longer a significant part of its business plan. While we like to see good brand recognition in a distressed investment situation, that by itself is not enough to make the company a good investment.
Kodak needs to prove itself all over again after coming out of bankruptcy. Prior to the Chapter 11 filing, management did not appear to have a good understanding of the company’s business prospects, and it remains to be seen if they will do any better going forward. We recommend waiting at least several quarters to see how management executes its new business plan before considering an investment in the reorganized Kodak stock.