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Kodak Patent Sale (Or Sales) And The Restructuring Of An American Icon?

|Includes:Eastman Kodak Co. (KODK)

Kodak has more than one lot of patents for sale, correct? So, there may be more than one bid winner here? In fact 218 may sell solo as a third lot.

Considering this seemingly forgotten factoid, the WSJ may have alluded to the initial bids for the lesser of the two (maybe three) lots.

Earlier reports from later last year allude to a small lot of patents possibly selling for 1 BIL.

It was recently reported that Android owns 85% of the existing smartphone market share. Will Google, Samsung, and the bunch, allow Apple and MicroSoft to obtain IP that could enable them to chip away at 85% of the existing and future smartphone market? Seems highly unlikely to me. Apple will not go down with a fight, and they assuredly did not ask MicroSoft and Intellectual Ventures to join forces if they honestly believed they could obtain this potentially Android damaging IP on the cheap Thus, Kodak should see a nice pay and so should investors holding long positions as pertinent news hits the wire.

In any case, it seems plausible to me that we see the lesser valuable lot to one bidder around 500 MIL, while the larger lot of digital imaging patents selling for around 1.2 to 2.2 BIL; this assuming the inclusion of '218.

This scenario would net Kodak 1.7 to 2.7 BIL. Add this to the 1.2 BIL Kodak reported in it's cash coffer in it's latest 10Q filing, and perhaps some additional asset sales, and Kodak may be able to satisfy it's immediate creditors at .50 on the dollar and re-reemerge from BK by year end.

The bigger question at hand is this; what will Kodak do to remain viable in 2013? Commercial printer sales, and perhaps OEM manufacturing for other printer brands? There should still be some viable revenue in film, the old cash cow that created this icon in the first place. Kodak has always been a pioneer in manufacturing and packaging ingenuity. It is also said Kodak is renowned for the highest quality in printer ink. Perhaps ink becomes an OEM specialty as well? The infrastructure is already in place, so the decision to exit the digital camera business and refocus on printing actually prove to be a very wise decision on the part of the existing BOD after all.

I am certainly not advocating that Kodak will return to the good ole days when Kodak stock traded in excess of 35.00 per share. Nor am I asserting that Kodak will reemerge as the blue chip stock that once donned the Dow Industrial Average.

What I am advocating are the facts as I see them. Kodak (EKDKQ) closed today's session around .345 with a market capitalization of approximately 100 MIL. This seems rather low for a company with approximately 4 BIL in sales, 1.2 BIL cash in hand, and listing over 5 BIL in assets. Add in the sale of it's digital imaging patent portfolio for an amount between 1.7 and 2.7 BIL, and we may see a thriving dog with trading in excess of 1.00 per share as early as next Monday; i.e. the deadline in which Kodak is scheduled to release news concerning the patent sale. Kodak may never again be King of the Jungle, but in the end, a thriving dog is better than a defeated lion.

Disclosure: I am long EKDKQ.PK.

Stocks: KODK