Kodak shares (NYSE:EK) surged 9.2% in trading Friday, as of 1:45 EST. Investors are excited about the next step in the company's mega patent-lawsuits.
CEO Antonio Perez from slapping a cash value on the settlement that might result if it does.
$1 billion.
"This is a lot of money, big money," Perez told Bloomberg, adding that his company "deserves to win."
Problem is, it lost once already. An ITC judge ruled in January that Apple and RIM didn’t violate the patent at issue here and declared the patent invalid because it’s an obvious variation of an earlier invention.
Now, it’s certainly possible that the commission could overturn that ruling. And, if it does, it’s also possible that it could block imports of the infringing products, which would obviously be a big incentive for both Apple and RIM to settle. That’s what Samsung and LG did when Kodak sued them over the same patent.
Even $1b may not save Kodak. In 2010 they reported losses of $687 million, though much of that was due to an accounting charge.
EK shares today trade around $3.42. That's down from an all-time high of around $92 in 1997. They were late to the game during the digital camera revolution and suffered the consequences.
Hard to believe this once-great tech-giant is trading at a sub-$1b market cap. Compare that with Apple's $323b valuation.
The stock looks cheap, but the company has lost billions in recent years. A turnaround has always been right around the corner.
For deep-value investors, it may be worth further investigation.
And IF inflation continues to pick up speed, the stock could be interesting from that perspective. Like Buffett said today, own businesses/stocks over bonds.
Stocks simply do a much better job keeping up with inflation, especially undervalued ones with good cash flow.
Who's suing whom in tech?
Found this great infographic by InformationIsBeautiful.net:
Kodak lawsuits diagram (click link)