Rumors were swirling as many were speculating that Kodak would be filing for bankruptcy last week. When the rumor of a bankruptcy filing hit its peak last Friday, stock shares fell sharply on the report that Kodak hired a bankruptcy attorney and law firm that specialized in restructuring.
On Monday, the troubled company denied that it had any intention to file for bankruptcy. When the market opened on Monday, stock prices almost doubled after the sharp drop on Friday. Later in the day, a spokesperson from Kodak said “it is committed to meeting all of its obligations and has no intention of filing for bankruptcy.”Yesterday, the ailing company made of $14 million payment to its bondholders.
Kodak, one of the oldest names in photography, has continued to struggle with the digital camera industry and has not been able to make a profit since back in 2007. Lately it has been looking into trying to sell its digital imaging patents. The patents are estimated to have a value of over $2 billion. This might be the shot in arm that Kodak needs to keep them out of Bankruptcy.
Kodak credit default stocks have been trading at distressed levels, making high concerns that they might default in the near future. It is now costing $7.1 million to ensure $10 million of Kodak debt, which is up from $5.25 million per $10 million in bonds insured just a week ago.
As creditors continued to dump Kodak bonds, the notes have lost two thirds of their value since September. Investors are saying that Kodak sponsor losing their value because they are selling the bonds once they receive them as a payment. As rumors of bankruptcy still continue to swirl, the company borrowed another $160 million against its credit line last week.