Kodak used to be one of the world’s better known brands and the historic New York-based photographic film company a reliable blue chip investment for conservative investors. However, Kodak failed to spot, or respond to, how the advent of digital photography would completely change the photography industry and decimate demand for their core product – camera film. In recent year, the brand name Kodak is unfortunately probably most often heard as part of the business jargon of a company having ‘a Kodak moment’. The idiom refers to a company or product becoming obsolete in the face of technological advances.
Within this context, the irony will not have escaped many who yesterday heard Kodak’s share price had more than doubled on the New York Stock Exchange on the back of the company’s announcement that it is launching its own cryptocurrency. Kodak’s malaise was brought about by the company’s management being too slow to react to world-changing developments in technology. Will its resurgence be brought about by being among the first to take advantage of getting onboard the new technology cryptocurrencies represent?
So should we all be logging in to our online stock brokers to buy shares in Kodak again? Or is it simply the latest case of the over-hyped cryptocurrency bubble that will inevitably end in tears for investors? It’s clearly impossible to tell at this stage but those considering investing online in Kodak will likely have the opportunity at a lower price than yesterday’s $6.80 level, up the equivalent of £1.20 over the day’s trading.
Analysts were quick to respond pessimistically to the surge in Kodak’s share price, with one proprietary trader at Las Vegas firm Bright Trading commenting:
“This is getting ridiculous. From a fundamental point of view, none of this makes sense.”
And that’s sentiment coming out of the casino-capital of the world!
But what is Kodak’s cryptocurrency play and longer term just how important is it likely to be to the recovery of a company that only returned from bankruptcy in 2013? Kodak’s cryptocurrency, which is aimed at photographers, is called the KODAKCoin. The initiative is in partnership with London-based licensing company WENN Digital. Kodak’s cryptocurrency is part of a wider blockchain platform that will help photographers protect and control image rights – a huge problem in the industry. KODAKCoin will ‘fuel’ the platform in a similar way to how Ether and NEO cryptocurrency units are used within their respective blockchain-based smart, decentralised contracts platforms. These cryptocurrencies are intended to be used in a specific environment to pay for a blockchain-based service, rather than as an alternative to fiat currencies like other cryptos like Bitcoin are positioned as.
As well as the KODAKCoin initiative, Kodak also announced that it is moving into Bitcoin mining. The company will invest in Bitcoin mining hardware which will then be leased out to customers keen to try and profit from the cryptocurrency from mining it rather than simply buying it.
Investors may well be interested in particularly the KODAKCoin photographic image rights blockchain product. However, it probably makes more sense to wait and see how this genuinely contributes to the business’s bottom line before investing online in shares. However, if it does work out, the term ‘a Kodak moment’, might just take on a whole new meaning. This time as a proactive approach to benefiting from new technology rather than being overtaken by it!