David Sterman

The year 1880 ushered in a new era of for America, setting the stage for technology leadership that would last for more than a century. That was the year that Wabash, Ind., became the first electrically lit city in the world, Thomas Edison conducted his first tests of an electric-power railway and the first cash register was made in Dayton, Ohio.

And in Rochester, N.Y., the Eastman Kodak Co. (NYSE: EK) was formed. Sadly, 2012 may spell the end of the famed company that spread the field of photography from technologists' niche to a mass market

How did this company slip so far to the point where its stock is below $2, at levels last seen in 1935, and perhaps headed to zero? It would be easy to pin it on the demise of traditional photography and the advent of digital photography. After all, this was a razor-and-razor-blades business model, because all of the consumables required to process and develop film were the cornerstone of Eastman Kodak's business.

But that's not the real story. Many other struggling technology companies had to learn to re-invent themselves. IBM (NYSE: IBM) for example, saw its stock slide below $10 (on a split-adjusted basis) in 1993 before an aggressive move into software and services saved the day. Its shares now hover just under $200.

David Sterman

David Sterman has worked as an investment analyst for nearly two decades. He is currently an analyst for StreetAuthority.com