Eastman Kodak Files for Bankruptcy

After 131 years in business, Eastman Kodak ($EK) has filed for Chapter 11. Actually, I’m surprised they made it this long.

Kodak’s story should be a reminder to fans of all fast-growing companies. EK was one of the most popular glamour stocks of the 1960s and early 1970s. The stock went from $10 in 1962 to $66 by 1972.

Ultimately, what did in Kodak wasn’t greed or avarice or even poor management (though that may have played a role). Instead, someone came along and built a better mousetrap.

When looking at stock charts, there’s a strong temptation to see the end result as perfectly obvious to the past. Consider that as late as October 2007, EK was going for $28 per share. What were they possibly thinking?

Over the last 40 years, EK has almost always lagged the market. The stock briefly outperformed the market in the early 1980s and again in the mid-1990s as it tried to reform itself.

You can see on the chart when EK spun off Eastman Chemicals ($EMN) in 1994 for about $12 per share. That stock lagged the market as well until 2000. Since then, it has beaten the S&P 500.

Posted by on January 19th, 2012 at 10:11 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

Tickers: