August 17, 2011
Kodak has been an imaging giant almost since there has been imaging. But they have been eclipsed by their own foot-dragging in digital imaging, and even their digital cameras sales are falling since nearly every new phone has a camera. That has been bad news for Kodak.
Over decades, Kodak has developed patents covering important imaging processes. That camera-phone-in-every-pocket problem may now turn those patents to gold. If there are more cameras (in phones) there may be more need for those imaging patents. Cases in point: an Apple-led group recently bought patents from Nortel for $4.5 billion. Nortel had expected to raise only $900 million from the sale. And then there was Google's $12 billion purchase of Motorola Mobility, mainly to get control of Motorola's patent portfolio.
What does this mean for Kodak? A piece by Bloomberg today suggests that the Big Yellow Box is worth 5 times its current price based on patents alone. Which means that Kodak's search for gold in its file cabinets may yield quite a haul.
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).