By Ben Dobbin, Business Writer

ROCHESTER, N.Y. (AP) --

An uncomfortable suspicion that an icon of American business may have no future pushed investors to dump stock in Eastman Kodak Co. Wednesday.
    The ailing photography pioneer’s shares fell to a new all-time low after the Wall Street Journal reported that Kodak is preparing for a Chapter 11 filing “in the coming weeks” should it fail to sell a trove of 1,100 digital-imaging patents.
    Analysts have said the patents could fetch $2 billion to $3 billion, but no takers have emerged since Kodak started shopping them around in July.
    In November, the 131-year-old company said it could run out of cash in a year if it didn’t sell the patents. Even as it looked to a future rooted in its emerging printer business, the company was reporting a third-quarter loss of $222 million — its ninth quarterly loss in three years — and it said its cash reserves had fallen 10 percent in three months.
    Now, Kodak finds itself in a state of suspended animation.
    “Everybody has a sinking feeling,” said Ulysses Yannas, a Buckman, Buckman & Reid broker in New York. “It’s possible they can file for bankruptcy protection. Yet I don’t think it’s probable — principally because the need for cash is not imminent.”
    Kodak’s shares tumbled 18 cents, or 28.2 percent, to close Wednesday at 47 cents and continued falling after hours. They hit their previous trading low of 54 cents on Sept. 30 when word leaked that Kodak had hired a law firm that advises companies on bankruptcy and restructuring options.
    In the dozen years before 2011, the company had lost more than 95 percent of its value as it was pummeled by foreign competition and then shaken to its core by a digital revolution. It launched the plan to sell off key assets as its shares fell another 80 percent in 2011, having started the year at about $3.
    “It feels like water torture,” said Mark Zupan, dean of the University of Rochester’s Simon Graduate School of Business Administration. “The game hinges on that (patent) sale, principally. And, at this point, they just have to create the insurance if they’ve got to go the other route. But the prospect of bankruptcy makes the sale more complicated too.”
    The New York Stock Exchange warned Kodak this week that its shares would be “delisted” — or dropped from the exchange’s listings — if they stay below $1 for six more months.
    The Journal said Kodak is in discussions with potential lenders for around $1 billion in loans called “debtor-in possession financing” that would keep it afloat during a bankruptcy process. The newspaper said a bankruptcy filing could occur by early February.
    A Kodak spokesman said the company does not comment on rumor or speculation.
    Three members of Kodak’s board of directors have resigned in the past two weeks. The latest was economist Laura Tyson, a member of the Clinton Administration and a former dean of the Walter A. Haas School of Business at the University of California, Berkeley.
    Since 2005, Kodak has poured hundreds of millions of dollars into new lines of inkjet printers that are finally on the verge of turning a profit. Home photo printers, high-speed commercial inkjet presses, workflow software and packaging are viewed as Kodak’s new core.
    Revenue from those businesses rose by a combined 13 percent in the third quarter, and Kodak said it expected the consumer printer to become profitable in the October-December quarter, typically the period that generates the bulk of its revenue. Kodak reports its fourth-quarter results on Jan. 26.
    Kodak is hoping the printer, software and packaging businesses will more than double in size by 2013 and account by then for 25 percent of its revenue, or nearly $2 billion.
    As Kodak’s cash reserves shrank to $862 million in the third quarter from $957 million in June, it set a new year-end cash target of $1.3 billion to $1.4 billion that excludes any intellectual-property licensing deals, down from a previous forecast of $1.6 billion to $1.7 billion.
    For years, Kodak has been sustaining itself in part by mining its inventions for revenue — and the hoped-for sale of its digital inventions represents a sharp tactical shift.
    That could be because Kodak picked up just $27 million in patent-licensing fees in the first half of 2011, compared with $1.9 billion in the previous three years. It expects to generate more than $340 million in the current quarter from at least two patent-licensing deals and the sale of non-strategic assets.

Key events in the history of Eastman Kodak Co.
   Here are key events in the history of Eastman Kodak Co.:

1880 – George Eastman begins commercial production of dry plates for photography in a rented loft of a building in Rochester, N.Y.

1888 – The name “Kodak” is born and the Kodak camera is marketed with the slogan, “You press the button, we do the rest.”

1889 – The Eastman Company is formed, taking over the assets of the Eastman Dry Plate and Film Company

1892 – The company becomes Eastman Kodak Company of New York.

1900 – The first Brownie camera is introduced. Selling for $1 and using film that costs 15 cents a roll, it brings hobby photography within financial reach.

1929 – The company introduces its first motion picture film.

1935 – Kodachrome film is introduced and becomes the first commercially successful amateur color film.

1951 – The low-priced Brownie 8mm movie camera is introduced, followed by Brownie movie projector in 1952.

1962 – The company’s U.S. consolidated sales exceed $1 billion for the first time. Its work force tops 75,000.

1963 – Kodak introduces a line of easy-to-use Instamatic cameras with cartridge-loading film (selling more than 50 million by 1970).

1972 – Five pocket-size Instamatic cameras that use smaller cartridges are launched. More than 25 million cameras sell in less than three years.

1975 – Kodak invents the world’s first digital camera. The toaster-size prototype captures black-and-white images at a resolution of 10,000 pixels (.01 megapixels).

1981 – Company sales surpass the $10 billion revenue mark. The next year, hometown payroll peaks at 60,400.

1984 – Kodak enters the video market with the Kodavision Series 2000 8mm video system and introduces Kodak videotape cassettes in 8mm, Beta and VHS formats, along with a line of floppy disks for computers.

1988 – Global payroll peaks at 145,300.

1992 – Kodak launches a writeable CD that its first customer, MCI, used for producing telephone bills for corporate accounts.

2003 – Launch of Kodak Easyshare printer dock 6000, which produces durable, borderless 4-by-6-inch prints.

2004 — Kodak begins digital makeover, the same year it gets ejected from the 30-stock Dow Jones industrial average. It cuts tens of thousands of jobs as it closes factories and changes businesses.

2008 — Kodak begins mining its patent portfolio, which generates nearly $2 billion in fees over three years.

2010 — Kodak sues Apple and Research in Motion before the U.S. International Trade Commission, claiming the smartphone makers are infringing its 2001 patent for technology that lets a camera preview low-resolution versions of a moving image while recording still images at higher resolutions. Global employment falls to 18,800.

July 2011: Kodak begins shopping around its 1,100 digital-imaging patents.

September 2011: Kodak hires Jones Day, a law firm that lists bankruptcies and restructuring among its stop specialties.

December 2011 — Judge extends camera patent dispute into 2012.

History Source: www.kodak.com and The Associated Press

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