Shares in photography giant Eastman Kodak plunged18% after it revealed its new strategy to adapt to the growing trend for film-free digital cameras.
Kodak is over reliant on traditional photography
Investors rushed to sell the shares after they learned Kodak plans to fund its switch to digital products by cutting its dividend pay-out to shareholders by 70%.
Kodak has cut thousands of jobs this year and watched profits fall as it struggled to cope with the popularity of new, digital photography.
But analysts warned that Kodak's decision - until now - to cling to its focus on its traditional markets of film, non-digital cameras and paper-based photographic printing means it is coming late to a crowded market.
Kodak, famous for making cheap Brownie cameras in the early days of photography, said it would spend $3bn on acquisitions and investments to develop new, digital business.
It also plans to use the money saved by cutting the dividend, traditionally one of the US stock markets' steadiest and most lucrative payouts. In 120 years, Kodak has never before trimmed its dividend.
"We are acting in the knowledge that demand for traditional products is declining, especially in the developed markets," said Kodak chief executive Daniel Carp.
He set out ambitious targets to lift total group sales to $16bn (£9.6bn) by 2006, and $20bn by 2010.
Kodak's second quarter 2003 sales were $3.35bn, unchanged from year earlier; quarterly sales have come in at roughly $3bn for the last year.
But analysts believe that rivals like Canon, Sony, Dell and Hewlett-Packard are already far ahead of Kodak in developing digital photography.
Credit ratings agency Standard & Poor's cut its rating on Kodak's short and long term debts after the presentation, though it said the outlook for the stock was stable.
S&P said Kodak's past track record had been "mixed, and the company really needs to do a much better job of getting costs out to maintain very strong profitability and cash flow".
"They have a lot to do, and I don't know if they can do it," said Leslie Fineberg of American Capitol Investors.
Kodak cut its dividend by 50 cents from $1.80.
Its shares closed down, $4.84, or 17.9% lower, at $22.15. The stock price fall contributed to the fall in the Dow Jones industrial average on Thursday, which closed down nearly 1%.