Shareholders Group Challenges Kodak's Digital StrategyShareholders Group Challenges Kodak's Digital Strategy

Eastman Kodak Co.'s new strategy of de-emphasizing its traditional film-based business and aggressively moving into digital photography is being challenged by a group of shareholders. Led by some Wall Street professionals, the shareholders are meeting Wednesday to develop a strategy to attempt to convince Kodak management to reverse the direction of the company.

"Our objective," said Herbert Denton, who's leading the objecting shareholders, "is to provide a forum for Eastman Kodak's major shareholders to discuss the critical issues which have brought ... Kodak's share price to a 20-year low."

Denton, who as president of Providence Capital Inc. has led similar shareholder uprisings against other public companies, said the shareholders group will focus on Kodak's strategy of emphasizing digital photography. Kodak unveiled the strategy in September, and investors responded by driving the company's stock down.

To fund its new direction, Kodak cut its dividend in anticipation of acquiring its way into the booming digital-photography business, which has cut into the company's traditional film-based markets. So far, Kodak is sticking to its guns and continuing its drive into digital photography.

Denton has led shareholder actions against other companies, including Digital Equipment Corp., Aetna, and Navistar International Corp.