Investors Dump Kodak Shares amid Bankruptcy Fears

October 01 00:00 2011

New York, October 1 (RainbowNewsLine.com) – Fears of Kodak’s imminent bankruptcy kept investors away from its stocks Friday. In a day marked by volatility, Kodak’s stock lost more than half its value before it went into damage control mode. In a statement, the company said that “Kodak is committed to meeting all of its obligations and has no intention of filing for bankruptcy,” and with this reassurance its shares rose in extended trading but fell far short of undoing the damage done in a hostile week for one of the luminaries of US business.

Kodak’s already rattled shareholders were shaken by the report in The Wall Street Journal Friday that a law firm Jones Day, that advises on bankruptcies and other restructuring options, had been hired by Kodak. The news was confirmed by Kodak in its statement that clarified that several advisers including the law firm had been helping the management to turn the corner as it had lost nearly $1.8 billion since 2007. Kodak said, “It is not unusual for a company in transformation to explore all options and to engage a variety of outside advisers.”

Earlier in the week, Kodak had confirmed that it was borrowing $160 million from a $400 million line of credit. Eastman Kodak shares went down 54 percent, or 91 cents, to close at 78 cents per share. In extended trading, the stock regained 35 cents. At the beginning of the week, they stood at $2.38.

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