• Kodak warns it may shut down after 133 years, lacking liquidity to meet nearly USD 500M in debt.
• The photography pioneer invented the digital camera in 1975 but failed to adapt, leading to bankruptcy in 2012.
• Today, Kodak still produces film, licenses its brand, and pursues pharmaceuticals, while seeking ways to refinance its obligations.

Kodak

The photography giant Kodak says it might have to shut down after 133 years. The company warns that it does not have the financing or liquidity to pay its roughly USD 500 million in upcoming debt obligations.

In its Securities and Exchange Commission (SEC) filing, Kodak warned that its inability to meet its debt obligations “raise substantial doubt about Kodak’s ability to continue.” It later announced that its plan to conjure liquidity is by ceasing payments for its retirement pension plan. This announcement led its shares to plunge 26% to USD 5.04.

The Eastman Kodak Company was incorporated in 1982 but its roots trace back to 1879. This was when George Eastman obtained his first patent for a plate coating machine. Later in 1888, Eastman sold his first Kodak camera for USD 25.

At the time, photography was not as accessible as today’s age, but the advent of the Kodak camera intended to make photography more widely accessible. In fact Eastman coined the slogan “You push the button, we do the rest.”

Rise and Fall

The company led a century of success producing cameras and films. In the 1970s it was responsible for 90% of film and 85% of camera sales in the US.

Interestingly enough, Kodak would later go on to essentially create the technology that would later undermine its own dominance. In 1975, Kodak essentially invented the first digital camera- a technology that could store photos electronically instead of on film. 

At that time, Kodak’s entire business model relied on selling film, processing it, and making prints. By inventing digital photography, they planted the seed for a future where film wouldn’t be needed anymore. 

The once- dominant company failed to capitalize on the rise of digital technology and related services. Instead, they stuck to film for too long. Thus, ironically, this innovation,  their own creation,  would eventually replace their core product and weaken their market position.

In 2012, Kodak filed for bankruptcy. At the time of its Chapter 11 filing, it had 100,000 creditors and debts totaling $6.75 billion. This is because in the age of digital photography, its traditional film business became increasingly irrelevant. 

Later in 2020, Kodak transformed into a pharmaceutical ingredients producer. During this reprieve, its stock price rose so fast, it was reported that it tripped 20 circuit breakers during the trading session.

However, this was but a mere reprieve given its recent losses. Despite these seemingly disastrous losses, the company says its aims to continue to expand the pharmaceutical side of their business. Until now, they are continuing to manufacture films and chemicals for business including the movie industry. They also license their brand for a variety of consumer products.

Alongside these attempts, the company is also actively exploring options to refinance or extend its remaining obligations. Despite the warning signs, Kodak’s leadership insists they can keep making progress in the face of these challenges.