Kodak Bankruptcy in the Works: Is There a Company Worth Reorganizing?

Unless you’re trying to auger an airplane into the side of a mountain, you don’t want to see a chart like this one, showing Kodak’s (EK) plunging share price and its trailing twelve-month revenue, also in nosedive mode.

Eastman Kodak Stock Chart by YCharts

News from the Wall Street Journal and others that Kodak is preparing a Chapter 11 bankruptcy filing is hardly surprising at this point, as the once-hugely-profitable film maker has been racing to raise cash, offering up its patents, to remain solvent and fund an attempt to reorient the company toward digital imaging.

Eastman Kodak Cash and ST Investments Chart by YCharts

Of course, there is enormous competition in its chosen field, and the market for consumer photography has been exceedingly unkind to Kodak. First, digital cameras supplanted film, rendering the company in essence a buggy whip maker. And then as it entered the digital camera business – D’oh – cell phones made by the likes of Apple (AAPL) and equipped with digital cameras began to supplant the stand-alone cameras.

Chapter 11 would allow Kodak some time to try to peddle its potentially valuable patents, to reduce debt and jettison unattractive operations. But whether what remains can become a sustainable, competitive company remains to be seen.

Jeff Bailey is an editor for the YCharts Pro Investor Service which includes professional stock charts, stock ratings and portfolio strategies.