Kodak Shares Plunge Again: Is Bankruptcy Close?

Kodak shares closed at only 68 cents, down 58 percent, giving the Rochester, N.Y.-based company a market capitalization of only $210 million. Its enterprise value, though, is $948.7 million.

Kodak officials denied bankruptcy was being considered. As we sit here today, Kodak has no intention of filing, spokesman Gerard Meuchner said.

Rumors swirled around Kodak because it is in the midst of a patent auction. Lawyers may have questioned the financial viability of the entire company as it tries to sell valuable intellectual property under a theory called fraudulent conveyance.

On Monday,, Kodak shares also plunged after announcing it had drawn down $160 million from a revolving bank line for general purposes. In an e-mail statement, a Kodak representative said the cash management has been used for quite some time.

Kodak has been trying to auction as many as 1,100 patents through Lazard over the past two months. Kodak CEO Antonio Perez previously confirmed the sale had attracted interest from many bidders.

Intellectual property investment banks such as MDB Capital of San Diego, Calif., have estimated the Kodak patents could be valued around $2 billion.

The patents, which could contain all kinds of useful IP for other imaging companies, smartphone and tablet makers, were put up for sale after Apple, Microsoft, Ericsson, Research in Motion and EMC paid $4.5 billion for patents from defunct Nortel Networks.

Neither Kodak nor Lazard has announced auction results.

Kodak, whose shares have fallen 87 percent this year, previously reported having cash and equivalents of $957 million on June 30.

Because it is so heavily consumer-focused, the company may have tapped cash to complete some fourth-quarter products or promotions.

More than 70 percent of Kodak shares are held by mutual funds and large institutions, including Kohlberg Kravis Roberts, the giant private equity firm. KKR has two directors on the board, who could potentially facilitate a direct company sale.

Perez, a former head of Hewlett-Packard's money-spinning printers division, said Kodak realized the value of its IP might be higher than believed after he saw the Nortel Networks auction.

From 1993 to 2000, Kodak had been managed by George Fisher, a former head of Motorola, who was recruited to help shove the 131-year-old company into the digital age. In August, Google agreed to acquire Motorola Mobility, Motorola's consumer business, for $12.5 billion, in part for its IP.

Kodak is advertising patents for technologies it's not using. While the company has sold many businesses over the year, from chemicals to medical imaging, it remains active selling cameras, printers, film, photofinishing and other services, competing with HP in online photography and printers.

In cameras, though, Kodak is well behind Japanese competitors such as Nikon and Canon in market share as well as profitability.