According to Barron’s,
Franklin Mutual Fund Series owns over 5% of Kodak as of July 14, and
they filed as an activist shareholder, the only one at Kodak. On June
17, the fund sent a letter to Kodak’s board, encouraging the company to
increase share buybacks. On June 24, Kodak announced it would begin a
$1 billion buyback, funded in part by a tax rebate,
At the end of the first quarter Kodak had $2.2
billion in cash. Franklin warned that the cash gave Kodak a chance to
regain shareholder confidence, but that there were concerns that Kodak
would instead pursue an ill-advised acquisition. And, they don’t think
that management at Kodak deserves to spend all their cash on an
acquisition, rather they need to focus on their core businesses.
Along with increasing the buyback program, Franklin said
that the company should return additional cash to shareholders, through
a special $6 per share dividend or a dutch auction.
Given where the stock is ($14), that would be a great one year return.
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