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02-10-2011, 09:06 AM
A grim reminder that any business, even an old, well-established one, may fade away due to changing technology and consumer preferences! It still must be "Buy and Monitor", not just mindless "Buy and Hold"!
The Straits Times
Oct 2, 2011
Kodak in danger of fading away
Company not filing for bankruptcy but its shares plummet
New York - Its legacy spans 13 decades, and boasts many American firsts, but Eastman Kodak, best known for cameras and photography, may be running out of options and time.
Concerns about its future boiled over last Friday, after it hired a law firm well-known for bankruptcy cases, sending its shares down 54 per cent to 78 US cents per share.
Although Kodak said it has 'no intention' of filing for bankruptcy, the fact that its shares closed under US$1, and market capitalisation shrank to less than US$300 million (S390 million), suggests investors may have lost faith.
The picture began to fade in September 2003. Film sales were dying, and Kodak slashed its dividend by 70 per cent, hoping to gain flexibility as it beefed up spending on commercial and inkjet printers, medical imaging devices and other digital systems. It stopped investing in traditional consumer film.
In January 2004, Kodak said it would trim costs by shrinking manufacturing and cutting some 15,000 jobs, or about 20 per cent of its workforce, over three years. Its workforce has since been pared to about 18,800 - 9,600 in the United States - at the end of last year, from 86,000 in 1998.
Kodak has been an iconic name in American business. Its history stretches back to inventor George Eastman's Eastman Dry Plate Company in 1881. By 1885, he had launched the first transparent photographic film.
The 'Kodak' camera hit the market in 1888, with the slogan, 'You press the button - we do the rest'. It rolled out Kodachrome, the first commercially successful amateur colour film, in 1935, but Eastman was unable to see its debut, having committed suicide in 1932.
Nearly a century later - in 1981 - its sales topped US$10 billion. It was ahead in the digital camera movement, with its Professional Digital Camera System in 1991 that enabled photojournalists to take electronic pictures with a camera equipped with its 1.3-megapixel sensor.
Mr Daniel Carp took over as CEO in 2000, right around the time that digital cameras started to become affordable.
Taking pictures without the use of film and the option to forgo printing proved a crippling blow to Kodak, which sold film, photo paper and the systems that develop film into prints.
Veteran Hewlett-Packard executive Antonio Perez joined in 2003, and became CEO two years later. He was instrumental in the shift to digital devices and services, hoping to outpace plummeting demand for film.
But some say that was already too late, since consumers had become enamoured with the ease of digital cameras, which allowed then to snap hundreds of photos without film or the need to make prints.
Today, most snapshots are taken with phones and viewed on Facebook, and it is tough to remember when Kodak's brand was stronger than that of the social media site.
Reuters
The Straits Times
Oct 2, 2011
Kodak in danger of fading away
Company not filing for bankruptcy but its shares plummet
New York - Its legacy spans 13 decades, and boasts many American firsts, but Eastman Kodak, best known for cameras and photography, may be running out of options and time.
Concerns about its future boiled over last Friday, after it hired a law firm well-known for bankruptcy cases, sending its shares down 54 per cent to 78 US cents per share.
Although Kodak said it has 'no intention' of filing for bankruptcy, the fact that its shares closed under US$1, and market capitalisation shrank to less than US$300 million (S390 million), suggests investors may have lost faith.
The picture began to fade in September 2003. Film sales were dying, and Kodak slashed its dividend by 70 per cent, hoping to gain flexibility as it beefed up spending on commercial and inkjet printers, medical imaging devices and other digital systems. It stopped investing in traditional consumer film.
In January 2004, Kodak said it would trim costs by shrinking manufacturing and cutting some 15,000 jobs, or about 20 per cent of its workforce, over three years. Its workforce has since been pared to about 18,800 - 9,600 in the United States - at the end of last year, from 86,000 in 1998.
Kodak has been an iconic name in American business. Its history stretches back to inventor George Eastman's Eastman Dry Plate Company in 1881. By 1885, he had launched the first transparent photographic film.
The 'Kodak' camera hit the market in 1888, with the slogan, 'You press the button - we do the rest'. It rolled out Kodachrome, the first commercially successful amateur colour film, in 1935, but Eastman was unable to see its debut, having committed suicide in 1932.
Nearly a century later - in 1981 - its sales topped US$10 billion. It was ahead in the digital camera movement, with its Professional Digital Camera System in 1991 that enabled photojournalists to take electronic pictures with a camera equipped with its 1.3-megapixel sensor.
Mr Daniel Carp took over as CEO in 2000, right around the time that digital cameras started to become affordable.
Taking pictures without the use of film and the option to forgo printing proved a crippling blow to Kodak, which sold film, photo paper and the systems that develop film into prints.
Veteran Hewlett-Packard executive Antonio Perez joined in 2003, and became CEO two years later. He was instrumental in the shift to digital devices and services, hoping to outpace plummeting demand for film.
But some say that was already too late, since consumers had become enamoured with the ease of digital cameras, which allowed then to snap hundreds of photos without film or the need to make prints.
Today, most snapshots are taken with phones and viewed on Facebook, and it is tough to remember when Kodak's brand was stronger than that of the social media site.
Reuters
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