[aldevo]

Hello George,

A close friend of mine is an analyst at a very large firm. Perhaps it is better to point out past occurances. At one point not long ago, some analysts suggested breaking up Apple, switching everything to Windows, or halting hardware manufacture to become only a software company. That was a time period when Dell was held up as the model of how a computer company should function. So now here we are a few years later, and market capitalization of Apple is greater than Dell . . . funny how that works out.

Now that is not to say that whatever EK does that might be contrary to analysts suggestions will be the best course, yet it is harder to find companied that swayed to analysts wishes. As much as we badmouth Perez, if he simply did whatever the majority of analysts suggested, I truly believe EK would be gone as a company in only a few quarters.

The reporters are a different matter, and many of them are pundits. It would be the rare reporter that could perform the job of an analyst, or that of a CEO.

The cycle is often buy as many competitors as possible to make your company as close to being a monopoly as governments will allow. Then when the company is too big to function efficiently, sell of the divisions to others, until the company is again small, and can then merge with another company. This starts the cycle over again, though perhaps another name or another company. During all this change, lots of institutional investors are making money on the volatility of the market. Stability is the anti-thesis of potential financial gains.

Analysts are quite good at what they do, but they are not equiped to run manufacturing companies. That should be the point of what I posted. People whose emphasis is financial aspects can make good CFOs, or maybe CEOs of financial institutions. Let financial people call too many shots, then you end up with many of the problems that major auto makers have experienced (or are currently experiencing). Sustainability means more than crunching numbers.

Film generates good profits, and enjoys good profit margins at EK. Obviously at whatever point that was no longer true, then they should close or dump that division. Until that time comes, they need to emphasize the other businesses they now own; Kodak could easily be known as the giant in printing, but they need to change that public perception of being a film company.

Ciao!

Gordon Moat
A G Studio

I agree with you 100%.

Most manufacturers in the EU and Americas are forced to finance their operations with debt. Much of it is high-yield and the Hedge Funds are the largest buyers in these markets.

Corporate finance in the EU and Americas have tried to create a market for their high-yield bonds for a very long time. The result is that Hedge Funds can descend on these operations and jerk the management around like puppets because they control the appetite for the company's debt. Not surprisingly, most financial analysts are a lot more interested in the debt offerings of manufacturers than the stocks themselves.

Now CFOs are complaining about Hedge Funds and this is akin to Dr. Frankenstein confronting his own monster and trying to convince it that it doesn't know its place.

Kodak's brand transformation will be very difficult execute. They have traditionally been a maker of low-priced consumables and, for better or worse, they are now a maker of consumer electronics. Kodak hasn't really done much in the digital world for photo enthusiasts. And, like it or not, inkjets will become, increasingly, an enthusiast market. The rest of the photo takers will simply be content to pay a few cents to Walmart or Costco for prints - or, as is increasingly the case, eschew reflection prints altogether.

Apple did have some credibility in high-priced electronics before tackling consumer electronics. The gap wasn't nearly as large as the one Kodak faces now. They were pioneers in both PDAs and MP3 players and still couldn't make the former work for them.. Kodak, on the other hand, is arriving late to the party.

But none of that really matters to me - I just want to be able to buy Tri-X and the odd roll of T-max for a bit longer...