You know things are going poorly for a company when its stock surges 50% simply because it didn’t file for bankruptcy over the weekend.
Despite several reports indicating that Eastman Kodak (EK) had brought in a restructuring law firm and was considering a Chapter 11 filing, the once iconic imaging company survived the weekend intact.
In fact, after seeing its stock plummet 53.85% and break below $1, Rochester, N.Y.-based Kodak released a statement late Friday denying the bankruptcy talk.
“Kodak is committed to meeting all of its obligations and has no intention of filing for bankruptcy,” the company said in the statement. “Kodak remains focused on meeting its commitments to customers and suppliers, and on delivering on its strategy to become a profitable, sustainable digital company.”
Buoyed by the bankruptcy denial, shares of Kodak races 48.70% higher to $1.16 after Monday's opening bell.
Kodak, which employs close to 19,000 people, has fallen on hard times due to the evolution in the imaging world toward digital. The 131-year-old company has been forced to sell its patents in an effort to raise cash, a strategy it reaffirmed late Friday.
Kodak also downplayed the hiring of restructuring law firm Jones Day, a move that only reinforced the bankruptcy talk.
“It is not unusual for a company in transformation to explore all options and to engage a variety of outside advisers, including financial and legal advisers,” Kodak said. “Jones Day is one of a number of advisers that Kodak is working with in that regard.”
Still, the clock does seem to be ticking for Kodak to get back on its feet as its market cap plummeted below to $200 million on Friday – a paltry level for a company whose revenue topped $10 billion in the 1980s. It also faces a possible delisting from the New York Stock Exchange due to slumping below $1.00 a share.