Kodak sitting on gold mine of IP

Say cheese!

A Bloomberg report indicating Eastman Kodak’s patents may be worth as much as five times more than the business itself sent shares of the 131-year-old company soaring in Wednesday trading. The article cited MDB Capital Group, who said that in the wake of Google’s (GOOG) purchase of Motorola Mobility (MMI), Kodak’s digital imaging patents may be worth as much as $3 billion.

Kodak’s technologies are used in 85% of digital cameras and smart phones according to Rafferty Capital Markets and potential suitors could include Microsoft (MSFT) or Samsung. Kodak has struggled for the past several years as it was to slow to move to digital photography while brands such as Canon and Nikon accelerated, driving shares to a fraction of their $94 value in 1997. Since current CEO Antonio Perez took the reigns in 2005, sales have declined every year and the company has reported a total of $2.5 billion in losses.

The report states Kodak’s 1,100 digital patents make it an attractive acquisition target to smart phone manufacturers as intellectual property battles heat up. Kodak itself is currently in the midst of a patent infringement suit with Research In Motion (RIMM) and Apple (AAPL) that is expected to be settled this month and could be worth as much as $1 billion.

Eastman Kodak (EK : NYSE : US$2.70), Net Change: 0.56, % Change: 26.17%, Volume: 56,055,535

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About the Author

Canaccord Genuity Inc. is a global investment banking and institutional brokerage firm. Their website is www.canaccordgenuity.com.

For disclosures of any equities mentioned here please see: http://www.canaccordgenuity.com/en/ODD/pages/disclosures.aspx.

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