Eastman Kodak shares fell nearly 23 percent on Monday, the first trading day since the company said it was borrowing $160 million against its credit line.
Investors raised more questions on Monday about the progress of Kodak's patent sale and how much cash it was using to bankroll its transformation. The company has labored for years to convince Wall Street it can turn a profit as it shifts toward digital technology and away from its ailing film business.
Kodak is borrowing the money for "general corporate purposes," it said in a filing with the U.S. Securities and Exchange Commission. The loan has an interest rate of 1.5 percent, and Kodak has until at least 2016 to pay back the money. In April, the company entered into an agreement for a new credit facility of up to $400 million.
Gregg Abella, a principal of New Jersey-based Investment Partners Group, said he was frustrated by Kodak's cash borrowing.
"The market is perceiving this as the company is unable to operate on the cash reserves it has," said Abella, who owns 200,000 shares of Kodak and is also a bondholder. "Where is their CEO? We've heard nothing from him as the stock continues to plummet."
Shares of Kodak are down 66 percent this year.
Abella also said he was concerned that the company's patent sale was taking too long. Kodak hired Lazard in July to help shop around about 10 percent of its U.S. patent portfolio. Analysts have said the patents could be worth more than $2 billion.
"The purpose of the revolving credit facility is to bridge timing differences between cash outflows and inflows, which is a common practice at many corporations," Kodak said in a statement on Monday.
Rafferty Capital Markets analyst Mark Kaufman said he was expecting Kodak to borrow money against its credit line and had no doubts that the company can pay back the amount.
But analyst Shannon Cross of Cross Research cut Kodak's price target to $1 on the "unexpected cash usage."
The shares were down 22.7 percent at $1.84 in morning New York Stock Exchange trading.
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