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Presenting Eastman Kodak's Main 'Value Investors'

Tyler Durden's picture


As EK is halted on news that it is considering patent sales and potential bankruptcy (very much in line with the expectations CDS markets have had for a while), we present the professional falling-knife-catchers (sorry value investors) who owned the most at the end of Q2. Has anyone heard from Bill Miller today? Largest holder was LMM LLC (yes that Legg Mason). Or is Bill Miller preparing for a speech at some Value Investing Shindig?

With the short-dated bullet bond trading $44 - down 50% on the week - it seems the events have caught a lot of people by surprise...though CDS cracked on Monday and has shifted from 35/36% upfront to 64/65% upfront now - seems like equity-holders clung to 'hope' just a little too long.

Chart: Bloomberg


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Fri, 09/30/2011 - 14:54 | 1726936 Dumpster Fire
Dumpster Fire's picture

Dog food line is going to get crowded.

Fri, 09/30/2011 - 14:56 | 1726944 monopoly
monopoly's picture

Just make sure you leave some for my 2, 85 pound puppies. :)

Sat, 10/01/2011 - 00:00 | 1728232 cynicalskeptic
cynicalskeptic's picture

Raising your own meat huh?


Fri, 09/30/2011 - 14:57 | 1726948 sabra1
sabra1's picture

with the right spices, you can make roadkill taste like chicken!

Fri, 09/30/2011 - 15:17 | 1727038 Pool Shark
Pool Shark's picture



"Value Investing"?

Didn't we used to refer to that as "Dumpster Diving"?


Fri, 09/30/2011 - 15:21 | 1727053 oh_bama
oh_bama's picture


Sat, 10/01/2011 - 08:55 | 1728583 covert
covert's picture

kodak will have a tough time for a long time.


Fri, 09/30/2011 - 14:55 | 1726937 Vergeltung
Vergeltung's picture

Vanguard holds the number two spot? Ugh......and they recently ADDED exposure to EK?


double Ugh. :(


Fri, 09/30/2011 - 15:03 | 1726978 narapoiddyslexia
narapoiddyslexia's picture

Goldman Sachs appears to have tripled its exposure recently.

Fri, 09/30/2011 - 15:55 | 1727199 ghostfaceinvestah
ghostfaceinvestah's picture

And look at the exposure of Bill Gate's money - not only was the foundation in it, but his personal investment too (Cascade)

Fri, 09/30/2011 - 17:46 | 1727623 Earl of Chiswick
Earl of Chiswick's picture


Fri, 09/30/2011 - 14:55 | 1726938 sabra1
sabra1's picture

to bad buffet wasn't a major shareholder! his camera still uses glass plates!

Fri, 09/30/2011 - 14:55 | 1726941 SheepDog-One
SheepDog-One's picture


Fri, 09/30/2011 - 14:55 | 1726943 reader2010
reader2010's picture

Blame it on digital photography.

Fri, 09/30/2011 - 14:57 | 1726947 Shash
Shash's picture

Gates Foundation ?! 

Fri, 09/30/2011 - 14:58 | 1726951 monopoly
monopoly's picture

u guys notice, that is spite of all this crap today, miners are hanging tough. Maybe trying to carve out a bottom. 0

Fri, 09/30/2011 - 14:58 | 1726952 Vergeltung
Vergeltung's picture

if they go under, that's really bad for the city of Rochester, and upper NY State in general.

Fri, 09/30/2011 - 15:32 | 1727088 rtalcott
rtalcott's picture

EK...really arrogant for rochester...well...more time for the folks to enjoy that beautiful 4 season climate....very early 80's...Sony was showing off their digital camera prototype....EK's reaction...THAT will NEVER replace film!  It was never a question of IF (digital AND EK BK) but when...yes...lots of little people lose but the management at the top will do OK...

Fri, 09/30/2011 - 15:49 | 1727172 Grifter
Grifter's picture

And this on the heels of Paetec/Windstream Midtown Plaza debacle.  (Am a Roch resident.)

Fri, 09/30/2011 - 16:19 | 1727311 rtalcott
rtalcott's picture

Yes...Paetec!  I had some bean counter tell me...we are becoming Telecom Alley...of course originally it was Flour City...eventually Optics...I had the misfortune to live there...

At least U of R is doing very well....same for RIT...

Fri, 09/30/2011 - 16:36 | 1727397 Dirt Rat
Dirt Rat's picture

The Eastman School of Music still rocks. I was there in the early 80s, a high school student away from home and Mommy and Daddy for the first time. The New York drinking age was still 18 and they didn't seem to card much. I had a very good time in Rochester ;-)

Fri, 09/30/2011 - 17:54 | 1727644 rtalcott
rtalcott's picture

Agree....Eastman...the music school and the Eastman museum...

Fri, 09/30/2011 - 16:45 | 1727440 Blano
Blano's picture

Yeah, couldn't have happened to a nicer place.  /sarc

I had some unpleasant experiences there with a female, so I'm a little biased.

Fri, 09/30/2011 - 15:00 | 1726962 Cman5000
Cman5000's picture

Blame it on digital photography NOT they didn't keep up with the game. I think they might be done permanently ..

Fri, 09/30/2011 - 15:01 | 1726966 fyrebird
fyrebird's picture


And they were at $30/sh as recently as 2007?!?

Man, what a train wreck. If anyone wanted to see what is happening to the US industrial base on the side, just look at EK.

Fri, 09/30/2011 - 15:16 | 1727030 mayhem_korner
mayhem_korner's picture



I think it's more that the geniuses in the tower didn't see the digital age and the end of film coming. 

Fri, 09/30/2011 - 15:56 | 1727201 DCFusor
DCFusor's picture

They messed up well before.  Fuji killed them on both price and quality in film long before this.  Their patents on ->Digital<- are worth way more than the company, estimated about 3 bill.  So they saw it coming, alright.  They just lost the ability to execute long before.

Fri, 09/30/2011 - 16:42 | 1727422 Dirt Rat
Dirt Rat's picture

And I would have to point to the geniuses at the Big Three Dinosaurs who paid no attention to when the comet hit back in the early 70s with the oil embargo. They're still lumbering towards extinction.

Fri, 09/30/2011 - 16:48 | 1727453 Quantum Nucleonics
Quantum Nucleonics's picture

Somewhat surprising, well maybe not, that they couldn't see the digital age coming.  They had some excellent digital imaging products in the early 90's - mostly for scientific and defense applications.  I used one of their chips to build an imaging camera for astrophysics applications in the early 90's.   They didn't have the people and foresight to translate those products to consumer products.  I would think they have some very valuable patents in the digital imaging area.

Fri, 09/30/2011 - 15:02 | 1726969 youngman
youngman's picture

They went under ten years ago...more or less...some interesting names on that list....Vanguard has to buy...its a market thing for them....if there is value at $4..then there must be value at 50 cents....its all a patent lawsuit now...

Fri, 09/30/2011 - 15:02 | 1726972 buzzsaw99
buzzsaw99's picture

Insiders did well, so don't worry about them.

Fri, 09/30/2011 - 15:02 | 1726973 faustian bargain
faustian bargain's picture

Too bad EK doesn't make toilets.

Fri, 09/30/2011 - 15:51 | 1727175 karzai_luver
karzai_luver's picture

Owebama with the bailout in 3 ...........2............1


Of course they can bid on assistant printer job for Bernake.

think of the purty currency they could make.



Fri, 09/30/2011 - 16:41 | 1727416 Freddie
Freddie's picture

...or diapers for old people like Buffett

Sadly Kodak did not get into solar. 

Fri, 09/30/2011 - 15:02 | 1726976 Tsar Pointless
Tsar Pointless's picture

Mama, don't take my Kodachrome away!

Fri, 09/30/2011 - 16:44 | 1727435 Freddie
Freddie's picture

I wish someone would push Paul Simon into a wood chipper.

Fri, 09/30/2011 - 15:09 | 1726982 Mercury
Mercury's picture

EK has been in a death spiral pretty much since digital photography day one.  I'm surprised it's taken this long.

But Jesus, hasn't Bill Miller learned not to ride these bombs down to zero by now?

Fri, 09/30/2011 - 15:16 | 1727035 lizzy36
lizzy36's picture

Apparently not. Dude doesn't understand Buy and Hold died around the turn of the millenium

Fri, 09/30/2011 - 15:53 | 1727188 ghostfaceinvestah
ghostfaceinvestah's picture

It isn't just an issue of buy and hold, that guy is the personification of the term "Value Trap".  Some of the stuff he was pimping the past couple year - geesh, you would think he would have learned his lesson.

Fri, 09/30/2011 - 15:52 | 1727181 ptoemmes
Sat, 10/01/2011 - 00:08 | 1728243 Michelle
Michelle's picture

The assumption here is that these shareholders aren't hedged. I'll bet not.

Fri, 09/30/2011 - 15:22 | 1726995 Dr. Engali
Dr. Engali's picture

Good Lord. How can all of these "smart people" not see this coming? EK has been behind the curve for years. I have a friend who was an engineer in EK back when they meant something. He would tell stories about how hard it was to push a new concept through the beuraucracy there. Once they got rid of their dividend that was the sell signal.

Fri, 09/30/2011 - 15:09 | 1726997 Schmuck Raker
Schmuck Raker's picture

Artis. Is that Latin for timing?

Fri, 09/30/2011 - 15:12 | 1727011 junkyardjack
junkyardjack's picture

John Paulson breathes a sigh of relief, missed that one

Fri, 09/30/2011 - 16:45 | 1727442 Freddie
Freddie's picture

Goldman owns some.

Fri, 09/30/2011 - 15:14 | 1727023 mayhem_korner
mayhem_korner's picture

They still holding patents on 110 speed film?  That'd draw top dollar at auction...

Fri, 09/30/2011 - 16:49 | 1727455 Freddie
Freddie's picture

I think that 126 film is a growth industry.  This is so sad. I wish Buffet was in his bath close by. I would throw him  hair dryer and toaster.

Fri, 09/30/2011 - 15:14 | 1727024 Erin_Burnett_fo...
Erin_Burnett_footfetish_society_of_TrentonNJ's picture

Even if you buy today net cash is > stock outstanding, so you'll get a nice cash payout.

Of course company could survive and you'll will be sitting on a nice buddle.

Fri, 09/30/2011 - 17:48 | 1727628 Hephasteus
Hephasteus's picture

Net cash means stock outstanding. Nobody gets money from customers any more. Only stock holders.

Fri, 09/30/2011 - 15:14 | 1727028 Quinvarius
Quinvarius's picture

The banker raid on silver probably blew up their hedgebook and pushed them over the edge.  Good job banker cartel.

Fri, 09/30/2011 - 23:53 | 1728224 MrSteve
MrSteve's picture

I lived just up the road from Kodak HQ off State Street, nearer the lake. It was rumored in the 1970s that they had a pool on on the upper floors of the HQ building that had been slowly filled with ingots of silver, a giant brick of metal. If they have it, they ought to sell off a few hundred tons and spite the shorts. Or not.

EK hardly ever took in outsiders, as employees or as management and so is very insular. Sometimes that just kills you. They were trapped as much by sunk costs as slow market adaptation(ie, all USA manufacturers) Their legacy hold in graphics markets which have been totally destroyed in the advertising, imaging, mailstream and commercial printing collapse is just too many bridges to cross without tipping over the edge.

Can you name three other great old firms in the Dow 30 that are long gone now? Don't throw in Pan Am or Westinghouse.

Don't sell their patent story short. I saw their work at the U of R Laser Energetics Lab and their fusion experimental results rivaled that of Lawrence Livermore Lab's: very successful. The had partnered with Exxon in that venture and that is still alive. Fusion? working? not yet cost effective, but heading that way. Hold onto your wall paper if you are still holding. Pray for an energy transition breakthrough.

Maybe Vanguard has done a site visit?? Cynicism and sarcasm are fun but facts trump misperception in  the longer run.Time to think contrarian / blood in the streets? Lotsa capital and supporters from the old school involved here, including DoD. I'm just sayin'.

Fri, 09/30/2011 - 15:16 | 1727037 I am a Man I am...
I am a Man I am Forty's picture

all it would take is a two second look at the numbers of this company to know to stay the hell away, every single one of the money managers on that list should be fired

Fri, 09/30/2011 - 23:46 | 1728214 prole
prole's picture

Wow that's like the "reality slap in teh face" comment.

But still I regret the (evident) passing of an iconic American company. They basically invented the camera (as a user friendly affordable everyman product)

First Pan Am, now Kodak.


(As an aside I just thought -- they could probably hire a dozen Apple engineers and turn the whole company around)

Fri, 09/30/2011 - 15:19 | 1727040 SloMoe
SloMoe's picture

It's Friday. I believe Mr. Bill is on his yacht at the yacht club. Yo ho!

Fri, 09/30/2011 - 16:33 | 1727372 Freddie
Freddie's picture

Yo Ho Ho and a portfolio loaded with shit companies.

If Buffett was in the bath - I would throw him a plugged in toaster.

Fri, 09/30/2011 - 15:21 | 1727052 Arie L Ultra
Arie L Ultra's picture

Perhaps this is a good stock to sell, for Jimmy "boilerroom" Cramer.

Fri, 09/30/2011 - 15:22 | 1727055 kito
kito's picture

forget kodak, whos got money in hovnanian....KABOOM!!!!


poor ben b. he just cant raise housing from the dead, no matter how hard he tries.

Fri, 09/30/2011 - 15:39 | 1727120 Piranhanoia
Piranhanoia's picture

I hope everyone was savvy enough to stay out of Hovnanian's. They border Sylvania, Moronica, Freedonia, and the Duchy of Grand Fenwick. 

Fri, 09/30/2011 - 19:28 | 1727816 Hephasteus
Hephasteus's picture

85 percent chance of default. They still got another 40 50 percent before they are in real trouble.

Fri, 09/30/2011 - 15:22 | 1727056 buzzsaw99
buzzsaw99's picture

at least we know what the fed will be buying from gollum next.

Fri, 09/30/2011 - 15:26 | 1727071 mayhem_korner
mayhem_korner's picture



~40 years ago - in 1973 - EK was the 8th most profitable business on the Fortune 500 list, behind only GM, Exxon, Mobil, Ford, Texaco, IBM, and Chevron.

These times they are a changin'

Fri, 09/30/2011 - 15:52 | 1727183 buzzsaw99
buzzsaw99's picture

All public companies end up worthless (unless they are bought out before the final crash).

Fri, 09/30/2011 - 16:22 | 1727323 ghostfaceinvestah
ghostfaceinvestah's picture

Yup, especially ones that depend on innovation (i.e. some utilities might last forever).  Don't think that AAPL won't end up like this someday (though I think MSFT will meet this fate before them).

Fri, 09/30/2011 - 15:33 | 1727093 ReactionToClose...
ReactionToClosedMinds's picture

EK ... once one of the bluest of the blue chips



Joseph Schumpeter & Adam Smith  ... capitalism is unrelenting  .... why?   ... because it is propelled by the hidden hand of each individual. rightly or wrongly, seeking the best value solution for any purcahse, use or investment.  Schumpeter termed it 'creatve destrusction'   To disavow capitalism is to ask humans to stop being humans


For every business ..... your revenue composition is always fading and changing

Sat, 10/01/2011 - 01:55 | 1728339 jeff montanye
jeff montanye's picture

yes.  you are right.  while on a long enough time frame we are also all dead (or something) gold seems to keep its value, more or less.

Fri, 09/30/2011 - 15:45 | 1727150 Master Chef
Master Chef's picture

It's true that digital photography has hit Kodak very hard, but not keeping up with the competition is a basic business mistake. I wonder which Asian company will buy Kodak's brand, maybe just change it to EASTERN-Kodak.

And what about a tag line... "Summer memories with Kodak" , could become "Summer history, period.", but definately not "It's time to smile".

Of course it is a shame to see the former "largest industrial buyer of silver in the world" go down the plug hole - maybe they just should have kept some of that silver for a rainy day.

Say cheese!



Fri, 09/30/2011 - 15:55 | 1727194 ParaZite
ParaZite's picture

EK now equals EEEEEKKKKK!

Fri, 09/30/2011 - 16:13 | 1727273 navy62802
navy62802's picture

Wow ... a plunge of around 99% in EK stock price since Feb 1997 when it was just over $90/share. How's that buy and hold strategy working out?

Fri, 09/30/2011 - 23:50 | 1728220 prole
prole's picture


(course there is always XOM hmm?)

Fri, 09/30/2011 - 17:30 | 1727582 Bicycle Repairman
Bicycle Repairman's picture

When some wonk brought up digital technology at EK, I can just hear the marketing department:

"Don't cannibalize my film sales"!!!!!!!!!!!!!

Fri, 09/30/2011 - 17:39 | 1727603 Grand Supercycle
Grand Supercycle's picture

S&P500 updated chart at blog shows price converging towards apex.

It should drop out of triangle and resumption of downtrend.

Fri, 09/30/2011 - 18:02 | 1727659 Stuck on Zero
Stuck on Zero's picture

ANother company destroyed by China, Inc. with the acquiescence of Washington D.C.

Fri, 09/30/2011 - 18:45 | 1727739 daily bread
daily bread's picture

hmm .. if Kodak had been smart enough to rename themselves as "solar imaging", they might have swung a billion or so from Obama Cap.

Fri, 09/30/2011 - 18:59 | 1727764 Mauibrad
Mauibrad's picture

Amazing what 1 week will do.

Fri, 09/30/2011 - 19:54 | 1727853 PulauHantu29
PulauHantu29's picture

My broker in ~2002 told me to "buy all the Legg mason Funds you can" because he believed Miller was a genius based on his Amazon call.

Times change.....luckily I did not touch any of LeggMason stuff....

So does this the taxpayers will own EK now in addition to GM, AIG, Freddie, Fannnie, etc?

Fri, 09/30/2011 - 23:01 | 1728150 YesWeKahn
YesWeKahn's picture

Gates fundation has 5 millions shares.

Sat, 10/01/2011 - 00:08 | 1728242 cynicalskeptic
cynicalskeptic's picture

Change can doo those who are not prepared.  Kodak had a lock on a market that was doomed by digital.  Polaroid fared even worse.

Xerox lost the low end copier markte to better and cheaper Japanese machines but then - astoundingly - blew off all of the innovative technologies developed at their research center.  A company that developed the basics of personal computing, laser printing, graphical interfaces and far more DID NOTHING with cutting edge technology.  Read 'Fumbling the Future'

US auto companies ignored small cars - let the Japanese come in and run wiuth that market and instead of trying to do better went the opposite way with SUV's and huge pick-ups......   THAT panned out SO well.....

Buggy whips, linotype, the list is endless

Sat, 10/01/2011 - 07:11 | 1728462 dcb
dcb's picture

come on value investing is the way to go,  if you buy companies close to or below liquidation value you minimize your losses. I'd prefer to do the entire index, but the theory is correct.

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