Kodak Gallery Soon to Become Part of Shutterfly

Bobbie is a member of The Motley Fool Blog Network -- entries represent the personal opinions of our bloggers and are not formally edited.

In recent months we have witnessed the end of an era as Eastman Kodak (NASDAQOTH: EKDKQ.PK) comes to the end of its reign. The long standing company has faced major revenue losses and downgrades into penny stock status as the company finds itself on the edge of becoming obsolete. Kodak filed for Chapter 11 bankruptcy on January 19, 2012.

Kodak has put into motion the selling off of properties in a variety of venues in an effort to reorganize. Among the properties being sold is Kodak?s online photo service, which has just received a winning bid by Shutterfly, Inc

(NASDAQ: SFLY)
. Shutterfly agreed to purchase the online photo services for $23.8 million.

Despite Kodak?s difficulties the pending sale to Shutterfly has resulted in a surge for Shutterfly stock. Officially, the sale is not final until it receives approval from the bankruptcy court during the court supervised auction; however, that hasn?t stopped Shutterfly from adding a 19% gain, at last check.

In a continuing effort to restructure the company Kodak has also placed roughly 1,100 patents on the market seeking to raise between $1-2 billion dollars. The funds will go a long way in renovating the company and bringing it back to life in a more streamlined fashion. Kodak does face a dispute with Apple (NASDAQ: AAPL)

over some of the patents.

A hearing on March 8, 2012 will decide whether or not Apple will be able to file a patent infringement suit against Kodak preventing them from selling certain patents. Apple claims that Kodak?s digital cameras, digital picture frames, and printers were originally of Apple origin and are not Kodak?s to sell. 

Shutterfly will transfer all of the U.S. and Canadian customer accounts and images for Kodak Gallery to their own database. Customers will be allowed to opt out of the transfer should they choose to do so. The transfer will be a considerable undertaking as Kodak Gallery supports over 75 million users.

Once news of the deal reached the floors, Shutterfly experienced heavy options activity resulting in roughly 7,500 contracts being moved; nearly 17 times more than normal for the company?s activity.

The potential deal between Shutterfly and Kodak has definitely positioned Shutterfly to finish above its normal 10 and 20 week moving averages. The move has also caused analysts to predict favorable trends in the upcoming months.

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Source: http://feeds.fool.com/~r/usmf/foolwatch/~3/upm_pnbZKF4/.aspx

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