Kodak Shares Plunge

Eastman Kodak's shares dropped to the lowest point of the year Monday as investors reacted to the company's decision to borrow $160 million against its credit line. Julie Philipp from member station WXXI reports.

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STEVE INSKEEP, host: Some other news: Eastman Kodak's shares plunged yesterday to their lowest point of the year. Shares in the photo company fell to $1.74. Investors have been pounding down the stock all year, and the latest drop was sparked by the company's decision to borrow $160 million against its credit line. Julie Philipp from member station WXXI has more.

JULIE PHILIPP: Mark Kaufman, an analyst for Rafferty Capital Markets, says the move shouldn't have come as a surprise to Wall Street at this time of year.

MARK KAUFMAN: So what you're looking at is a company that's typically used cash through the first three quarters of the year, and then generated cash through working capital, cut sales and working capital coming back in for the coffers in the fourth quarter.

PHILIPP: That's the holiday season, when the company's camera and printer sales go up. Kaufman says Kodak could have dipped into its cash reserve, but borrowing against credit made more sense from an accounting standpoint. He's still listing Kodak as a buy. But many investors are losing patience as company officials keep promising a turnaround that has yet to materialize.

Bob Volpe is head of the Eastman Kodak Retirees Association, and he's worried the company might soon stop paying for retiree health care.

BOB VOLPE: It's sad to see the company get to this point, where it is not able to make the turn quickly enough in the digital world. It seems it still might happen, but it certainly isn't looking good.

PHILIPP: The retirees association is holding a series of meetings next month to help prepare retirees for a possible loss in benefits. For NPR News, I'm Julie Philipp.

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